Written Communications (Updated 12-06-2023) — Cupertino City Council, December 5, 2023

CC 12-05-2023
Written
Communications
Oral
Communications
From: Jean Bedord
To: City Council; Cupertino City Manager"s Office; City Clerk Subject: Oral Communications: Effectiveness of city commissions / hybrid meetings, Council Meeting, Dec. 5, 2023 Date: Monday, December 4, 2023 2:25:44 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

As the process of filling commissions moves forward, the city council and staff need to reexamine the role of commissions. Theoretically, they serve as advisory bodies to the city council, but mechanisms to function in that role are missing. This is not new -- over the last ten to fifteen years I've heard councilmembers express their frustration with the commissions, particularly when a commission has "gone off the rails". The monthly meeting with the mayor is not communication with the entire council, and the rotating representation from individual commissions means lack of continuity. The Nov. 7 council meeting Informational Memorandum from City Manager Wu (Item #14) regarding hybrid commission meetings was inadequate and failed to acknowledge the underlying problematic communication with commissions.

This lack of communication and effectiveness can be addressed in steps:
* Continue Planning Commission and resume Parks and Recreation meetings video recordings. The city has been archiving videos for these two commissions plus city council since 2005.https://www.cupertino.org/our-city/videos-on-demand/all-televised-meetings This
makes sense, since their actions an have impact years beyond individual commissioners and council members. The Parks and Recreation Master Plan took years to develop; the housing element covers eight years, and there are other long term projects. * All other commissions (1) provide a conference call number for residents to call in during the meeting (Pre-Zoom, I used freeconferencecall.com for committee meetings -
works well for low volume conferencing) and (2) audio record every meeting (this is already done to ensure minutes are accurate, but the recordings are erased after minutes are approved, and NOT posted). Post audio recordings on cupertino.legistar.com within 5 days after the meeting.
* Post all commission AND council meeting draft minutes on cupertino.legistar.com within 5 days after the meeting. Draft minutes are seldom revised, so not problematic with clear labels. This will improve transparency with the public and council since they won't have to wait two weeks to three months to find out what actions were taken. Delayed minutes are useless for effective communication. Replace the draft minutes with the approved minutes after the next meeting. * Include the draft minutes for every commission meeting in city council Informational Items as meetings occur. Council then has time to review the minutes and provide direction to the staff liaison and the commission prior to the next meeting. If clarification is needed, councilmembers can listen to the audio recordings.

The next step is to for council to review the objectives of the commissions, and areas that each commission can contribute value within the scope of the city and council work plans.

Council, with the guidance of the staff liaisons, needs to drive the direction of the commissions. There has been significant churn on commissions as well as staff in the last 8 years, so there is a lack of institutional knowledge. Some highly qualified commissioners decide to quit after their first term, feeling that the meetings were a waste of time. Other strong community members won't apply to commissions for the same reasons, even though they are otherwise civically engaged.

I urge the council to direct staff to implement these steps effective on January 1, 2024. City commissions need to be more effective, so they no longer waste resident and staff time.

A concerned resident and former library commissioner,
Jean Bedord
From: Cathy Helgerson
To: Office of Supervisor Susan Ellenberg; Supervisor Joe Simitian; [email protected]; [email protected]; [email protected] Cc: [email protected]; City Clerk; Peggy Griffin
Subject: Re: [EXTERNAL] Lehigh Cement & Homeless issues Date: Tuesday, December 5, 2023 5:36:39 AM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hello,
I have been an advocate for stopping the pollution at the Lehigh Hanson Permanente Cement plant for over 26 years and still counting. I am very familiar with Supervisor Joe Simitian's office and
have attended many meetings regarding the Lehigh corporation and their lack of cooperation which
should have been considered a lack of consideration for the public and their health over the years.

I am sorry to say that the public is still being polluted because they still have a Rock Plant on the property and
are crushing rock and selling it to the public. They are also bringing in and storing cement in the silos that
are on their property for sale; this should not be happening and it seems that they have some kind of
permit which allows them to take and sell cement this should not be happening.

They were also supposed to dismantle the cement plant and sell of the pieces or get rid of them but so far nothing is being done. False promises made by Lehigh and SCC and the
Board of Supervisors have done nothing about these matters.

I am reaching out to you because I would like the whole board to be informed and also would like all of
you to work with Joe's office to see that the reclamation plan new version is pushed through as soon as possible.

I have been told by his staff member that the letter informing Lehigh they will need to complete the
reclamation of 1000 pages. It seems it needs many changes and SCC states it is not complete.

The public is
not allowed to view this reclamation plan at this time. But once it is returned to SCC with updates and accepted
by SCC the public will be allowed to vi

I am wondering if it seems that SCC will be sending out this letter to Lehigh at the end of December and I
understand that there is no return date requirement set by SCC. I was also informed that SCC and
the board cannot do anything to push or set a time limit on Lehigh to finish the reclamation plan that is called
incomplete. My question here is why can't SCC and the board set a time limit? The last reclamation plan waa
dated way back in 2012 seems the time should have been up years ago and the public has waited way too
long and it is time to put strong pressure on Lehigh to process their new revised Reclamation Plan Amendment
or pay the price. I feel that eminent domain processes may need to take place if Lehigh continues to stall and
subject the public to this ongoing pollution problem which still remains. The very valuable land could be
cleaned up and used for the much needed housing for the low and poor income people who are living on
the streets.

I hope this matter is resolved ASAP and hope to receive word that the Lehigh company is working on this and
that the revised reclamation plan will soon be submitted to SCC. I have included two other people and the City
of Cupertino Clerk who have an interest in order to notify them of these matters. The public and I sit and
wait for justice to be served.

Thank you,
Cathy Helgerson - Environmental Enforcement Advocate
CAP- Citizens Against Pollution
408-253-0490
On Mon, Dec 4, 2023 at 8:00 PM Office of Supervisor Susan Ellenberg <[email protected]
> wrote:

Santa Clara County District 4 Supervisor Susan Ellenberg Hi Cathy,

My name is David Fernandez and I staff Supervisor Ellenberg on land use and housing issues. I appreciate you reaching out and including us in your email.

It sounds like you live in Cupertino, so I just wanted to make sure you are connected with Supervisor Simitian's office on your questions and concerns. Happy to make that connection. Thanks!

Best,
David Fernandez
Sincerely,
Susan Ellenberg
Board President
Santa Clara County Supervisor, District 4

70 West Hedding
East Wing, 10th Floor
San Jose, CA 95110
(408) 299-5040
Email Supervisor Ellenberg
District 4 Website
[PKXN94-KKPWN]
From: Long Jiao
To: City Council
Cc: City Clerk; Danessa Techmanski; Jon .

Subject: Written Communication for 12/05/2023 Council Meeting Date: Tuesday, December 5, 2023 1:19:25 PM
Attachments: Cupertino Voice Written Communication to City Council-12-05-2023.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Honorable Mayor Wei, Vice Mayor Mohan, Council Members Chao, Fruen, and Moore, Please include the attachment as general public comment for the 12/05/2023 Council meeting.

We are going to read it as oral communication as well.

Sincerely,
Long Jiao, Danessa Techmanski, Jon Willey
Cupertino residents
Who is Cupertino Voice?
We are a small group of Cupertino residents who care passionately about our community and the welfare of our city. We feel that the best way a city council can act on behalf of its residents is through direct democratic representation. As a way to achieve this we have worked to develop a polling system regarding important city issues and decision making that is as unbiased and neutral as possible. There are no right or wrong answers and our job is only to convey how our residents have voted.

Why Cupertino Voice?
Our city council exists to listen to and act on behalf of the welfare of our residents and to ensure our city’s financial health. However, having access to general public sentiment and opinion can be difficult as only a small sample of our residents actually attend city council meetings. For many it is not convenient, and for others it may not be comfortable to speak publicly. Our mission is to use a public polling system to find out what truly matters to Cupertino’s residents and give them a voice.

Our Method
Our survey is open to everyone. Participants are classified as verified Cupertino voters or as the general public. We publish both total results as well as individual votes anonymously so that participants can go back and verify their votes are counted properly. We do not see the names of voters (unless they wish to contact us with questions or comments), and we only consider those voters who are registered with a valid email address as “verified Cupertino voters” since we can validate them with two-factor authentication.

Survey #2 Recommendations
We performed two surveys in October 2023 and November 2023, respectively. The first survey was a pilot to test out our methods and technology. The second survey was How should Cupertino Balance its Budget Deficit .

We had some technical difficulties for the first survey which received 123 total responses with 81 from verified voters.

The second survey received 234 total responses with 212 from verified voters.

We would like to share some results from Survey #2 since there were two options that received more than 55% votes from registered voters.

The question was “What services do you think Cupertino can eliminate to further save money?” Option 1 “Scaling back the Staff Per 1,000 Residents to FY 2014-15 level would save the city $9M each year” received 151 votes in total, with 136 votes from registered voters.

Option 2 “Freeze city staff and employee salaries until the budget is balanced or in a surplus” received 131 votes in total, with 120 votes from registered voters.

The Staff Per 1,000 Residents kept increasing in the last ten years. We should scale back since our city can’t afford it anymore.

The residents took time to take the survey and provide the responses. It’s up to the city council to listen to the residents.

From: j w
To: City Clerk
Subject: Fw: please correct immediately--one of the worst injustice this modern era and deprive all Date: Tuesday, December 5, 2023 3:54:09 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City clerk,
Please publish it. We don't see it on the communication. Thank you! --long time residents ----- Forwarded Message -----
From: j w <[email protected]>
To: "[email protected]" <[email protected]>; Cc: City Clerk <[email protected]>
Sent: Tuesday, November 28, 2023 at 08:28:27 AM PST
Subject: Fw: please correct immediately--one of the worst injustice this modern era and deprive all
Dear council,
Another retaliation prosecution to court yesterday from outside law firm, it starts right the same time when the last email to council, while ban us to have any appeal so far, no appeal on it.
continue...
still silent from city and non stop prosecution persecution instead take the malicious unconstitutional ban out which danger our life...have sent numerous settlement package too...not much request on it...

On Monday, November 13, 2023 at 04:53:35 PM PST, j w <[email protected]> wrote:

Dear city council,
No response from city, but another persecution, prosecution in said today(last Friday)--all defaulted, but defaulted 22cv404353 needs be out per Delinger, not allow/never had any continue, with inflated 10k to put down or no case. That is not justice, which SMW law firm force court to do now. said is instructed by the city. We need know who is the behind it and please stop the injustice, persecution, prosecution at the earliest. Huang ----- Forwarded Message -----
From: j w <[email protected]>
To: [email protected] <[email protected]> Sent: Wednesday, November 8, 2023 at 08:49:01 AM PST
Subject: Fw: please correct immediately--injustice and deprive all No response but escalated persecution prosecution ...
>>>>
Hello City Attorney Jensen,
When the millimeter thin particle board, exposed sides to rain wind, etc.. to mark as bearing wall, etc.. is that right? within hours 5 figure retaliatory fine by the oppressor, no mtg increment $50 ever, who thought the interpreter was an attorney, is that right? two claims each for different property taken down away even belongings no notice saying is repeated filing, is that right? using those and more as vexatious, etc. then put us into further peril in all aspects, could not defend robbery, death threat, attack as 100lbs grey whitish hair soft-spoken (hell you put us in) Asian with young, grave ill elders long term residents, even all remotely related is that all 'false delusional', is that right? all the doctored pictures, personal stuff, this time said not put in, then again again put to court/in all over while we could not keep track but need support family, but generated further peril, lists goes on, is that right? underhandedly changed court to execute while our request/ motion/injunction are all not be heard, is that right?......you caused no one to want to help us under the color of the law is that right? lists goes on...

We need your immediate correction, in past months, outside law firms say you still make decisions but recused as you meant not 'work' on it, but the injustice escalated under the color of law to the weakest target in the city. We'd like to ask you to correct it immediately, can't fix it then resign. Thank you!
We pray!
Huang resident
Please refer to us anyone could help. Thank you! -------- Original message --------From: j w <[email protected]> Date: 11/21/23 11:46 PM (GMT-08:00) To: City Clerk <[email protected]> Subject: Fw: please correct immediately--injustice and deprive all- Dear clerk,Thank to let us know! It started to try to put on the oral communication weeks earlier on the wrongful labeling, another sanction and ban. Actually we had more to the oral communication before. on other retaliation too. Huang family----- Forwarded Message -----From: j w <[email protected]>To: "[email protected]" <[email protected]>; "[email protected]" <[email protected]>Sent: Thursday, November 16, 2023 at 10:33:51 AM PSTSubject: Fw: please correct immediately--injustice and deprive all-continue...still silent and non stop prosecution persecution instead take the malicious unconstitutional ban out which danger our life...have sent numerous settlement package too...nothing or lot less comparing to just one crook(other residents referred the name for us to use)'s one month cost we pay to...On Monday, November 13, 2023 at 04:53:35 PM PST, j w <[email protected]> wrote:Dear city council,No response from city, but another persecution, prosecution in said today(last Friday)--all defaulted, but defaulted 22cv404353 needs be out per Delinger, not allow/never had any continue, with inflated 10k to put down or no case. That is not justice, which SMW law firm force court to do now. said is instructed by the city. We need know who is the behind it and please stop the injustice, persecution, prosecution at the earliest. Huang---- - Forwarded Message -----From: j w <[email protected]>To: [email protected] <[email protected]>Sent: Wednesday, November 8, 2023 at 08:49:01 AM PSTSubject: Fw: please correct immediately--injustice and deprive allNo response but escalated persecution prosecution ...>>>>Hello City Attorney Jensen, When the millimeter thin particle board, exposed sides to rain wind, etc.. to mark as bearing wall, etc.. is that right? within hours 5 figure retaliatory fine by the oppressor, no mtg increment $50 ever, who thought the interpreter was an attorney, is that right? two claims each for different property taken down away even belongings no notice saying is repeated filing, is that right? using those and more as vexatious, etc. then put us into further peril in all aspects, could not defend robbery, death threat, attack as 100lbs grey whitish hair soft-spoken (hell you put us in) Asian with young, grave ill elders long term residents, even all remotely related is that all 'false delusional', is that right? all the doctored pictures, personal stuff, this time said not put in, then again again put to court/in all over while we could not keep track but need support family, but generated further peril, lists goes on, is that right? underhandedly changed court to execute while our request/ motion/injunction are all not be heard, is that right?......you caused no one to want to help us under the color of the law is that right? lists goes on... We need your immediate correction, in past months, outside law firms say you still make decisions but recused as you meant not 'work' on it, but the injustice escalated under the color of law to the weakest target in the city. We'd like to ask you to correct it immediately, can't fix it then resign. Thank you!We pray!Huang residentPlease refer to us anyone could help. Thank you! From: Tessa Parish
To: City Clerk; City Council
Subject: Oral communication
Date: Tuesday, December 5, 2023 4:53:49 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Honorable Council,
I would like to request that items that are note worthy not be put on “consent” and not place 2 topics into 1 item such as it is the item regarding 1. parking got private school 2. And changing zoning
Those 2 items should not be in 1 consent item. The amount of trouble/nuisance that 400 parked cars will make sin Amu neighborhood is huge, I believe should have been given more study and thought.

2. Canceling 4th of July fireworks without proper notice to the public is not sitting well with the public. I’ve heard it from several groups I have been attending for 12 yrs. I would want to know if there are any other options,
Best Regards,
Tessa Parish

CC 12-05-2023
Written
Communications
Item No. 1
Receive presentation
regarding revenue tax
measure options
From: Kitty Moore
To: Pamela Wu; City Clerk; Kirsten Squarcia
Cc: Matt Morley
Subject: Dec 5 Study Session Item 1 Staff Questions also submitted for Written Communications Date: Monday, December 4, 2023 7:07:33 AM
Attachments: Budget Balancing Strategies Pages from FY_202122_Adopted_Budget.pdf VallcoRise Plan check from FY_2023-24_Adopted_Budget.pdf Budget Balancing Pages from FY_2023-24_Adopted_Budget2.pdf Hi,

The following questions/comments are regarding Item 1 of the December 5 Study Session for Staff and submitted for Written Communications:

Thank you for providing the revenue generating strategies for Tax Measures.

Attached please find the Budget Balancing Strategies from FY 21-22 which has more data estimates and the Vallco/Rise Plan check fee estimate.

Question 1:

Business Operations Tax: Palo Alto, Mountain View, Santa Clara, and Sunnyvale each receive a significant amount of annual revenue from this source and have large business presences in their cities. Could there be more explanation for why this is not a recommended strategy when 95% of cities impose one or more of these taxes, and what are the special purposes the local and statewide cities are using these funds for?

Question 2:

With regards to the Vallco/Rise Plan check fee estimate, how much of the $30M estimate is a pass through to the plan check contractor who would be responsible for that work, how much would go to funding City Staff, and what would be the left-over portion? Is it General Fund or assigned? When the Development Impact Fees are deposited with the City for this project, those funds are restricted to their various accounts, is that correct? For instance, Transportation Impact Fees must be used for transportation impact and cannot be reallocated to salaries as these are AB 1600 funds.

Question 3:

Question 4:

At the previous Council meeting, the 4th of July fireworks were canceled to save approximately $140k without looking at Budget-Balancing Strategies as a whole which would be a combination of Revenue and Expenditure modifications. This Study Session contemplates only taxing the community. Are we going to have a meeting discussing a more holistic approach to Budget Balancing and/or provide a recap of what has been done so far?

Question 5:

What calculations have been made with regards to square footage parcel tax? Specifically, please show the assumptions ($/sf, square footage) and calculations. It is my understanding that all properties are treated equally when applying a square footage parcel tax, whether commercial or residential, is that correct?

Thank you,

Kitty Moore

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389

Budget-Balancing Strategies
Historically, the City’s budget has been structurally sound, with revenues exceeding expenditures in most years. When revenues have exceeded expenditures, the City has transferred the excess fund balance to the Capital Reserve per the City’s One Time Use and Reserve Policy. The current 5-year and 20-year forecasts anticipate operating deﬁcits beginning in FY 2026-27. The operating deﬁcits are projected to increase as revenues grow at a slower pace than expenditures. As a result, the following strategies may be used to assist in balancing the budget over the next 20 years.

Strategy
Description
Potential Impact
Expenditures

Section 115 Trust
The City established a Section 115 Trust, or Pension
Rate Stabilization Program, to reduce pension rate
volatility when CalPERS investment returns are below
the discount rate or when CalPERS changes
assumptions.

The City can also use it to offset pension costs in any given year.

The fund is
currently at $17
million.

Economic Uncertainty
Reserve
The City has $19 million in its Economic Uncertainty
Reserve (General Fund).

The fund is
currently at $19
million.

Additional Potential Strategies
Although not recommended at this time, the City may consider the following potential strategies in future years if sharp declines in revenues or increases in expenditures cause large structural deficits.

Potential Strategy
Description
Potential Impact
Revenues

Transaction and Use Tax (1/4
cent)
Voter approval required, could bring sales tax from
9% to 9.25% for the City.
$4 million
Transient Occupancy Tax
Measure
Voter approval required, could bring rate from 12% to
14%
•$1.7M @ $10M base
•$1.25M at $7.5M
base
•$833k at $5M base
FY 2021-22 Adopted Budget
Financial Schedules
177
Parcel Tax
Voter approval required
•$3.5M flat rate per
parcel
•$3.6M variable rate
per SF
Expenditures

Salary and benefit savings
through attrition
Keep non-essential positions unfilled as they become
vacant.

Approximately
$180,000 per
position on average
Employee cost-sharing of
increases to CalPERS
Negotiate to share costs of increases to CalPERS
employer rates with employees.
$250,000
approximate based
on 5% rate increase
No new positions
Cost containment strategy
$0
Furloughs
Employees would take up to 20 hours or the
equivalent of a 1% decrease in pay in exchange for 2.5
unpaid furlough days
$300,000
approximate based
on 1% decrease
Deferring or eliminating
negotiated increases
The City has negotiated a 3.5% increase effective the
first pay period in July 2020 and a 3% increase
effective the first pay period in July 2021. Deferring or eliminating negotiated increases would require
agreement from the bargaining units.
$300,000
approximate based
on 1% decrease
Reduction in force
The City would identify what positions could be
reduced (laid off) based on provisions in the MOUs
where appropriate and service level needs in the City.

Approximately
$180,000 per
position on average
Reduction in capital outlays
and special projects
Cost containment strategy
Up to $1.5 million
Reduction in contingencies
Cost containment strategy
Up to $850,000
FY 2021-22 Adopted Budget
Financial Schedules
178
Apple Park and large residential projects (Rosebowl, Biltmore expansion, Main Street) generated signiﬁcant permiHing revenues in FY 2013-14. Since then, activity has slowed until FY 2018-19, when revenues came in 48.8% higher. Although this revenue source is relatively consistent from year to year, ﬂuctuations may occur depending on the timing of projects being completed. The $34 million estimated amount in FY 2022-23 is due to Vallco Town Center (renamed The Rise) and its scheduled commencement in FY 2022-23. However, due to the developer's need to hire a new architect to complete the buildout plans and to value engineer the original design, the $30 million plan check fee revenues will be carried forward and recognized in FY 2023-24.

Use of Money and Property
The use of money and property category is comprised of General Fund interest earnings as well as facility and concession rental income of City-owned property. As of March 31, 2023, the City's portfolio included $21.3 million invested with the Local Agency Investment Fund (LAIF) and $149.7 million invested with Chandler Asset Management. As of March 31, 2023, the City also had $18.3 million in its Section 115 Pension Trust.

Fluctuations in this revenue category are a result of investment earnings, as rental income is fairly steady.

Investment earnings were higher in FY 2019-20 and FY 2020-21 due to investment gains in the City's Section 115 Pension Trust. Investment earnings fell in FY 2021-22 due to mark-to-market adjustments to account for unrealized losses in the City's portfolio.

The portfolio's market value ﬂuctuates depending on interest rates. When interest rates decrease aOer an investment is purchased, the market value of the investment increases. In contrast, when interest rates increase aOer an investment is purchased, the market value of the investment decreases. At the time of purchase, the City FY 2023-24 Adopted Budget
General Fund Financial Schedules
153
Potential Budget-Balancing Strategies
Historically, the City has maintained a structurally sound budget, with revenues surpassing expenditures in most ﬁscal years. During periods of excess revenue, the City has transferred the surplus fund balance to the Capital Reserve Fund in accordance with the City's Fund Balance and Use of One-Time Funds Policy.

However, the forecast shows a potential structural deﬁcit resulting from the anticipated decrease in sales tax revenue due to the CDTFA audit. A structural deﬁcit occurs when recurring expenditures consistently surpass recurring revenues, leading to an ongoing imbalance that cannot be remedied through short-term solutions.

Potential
Strategy
Description
Potential Impact
Currently
Recommended
Section 115 Pension
Trust
In FY 2017-18, the City established a
Section 115 Pension Trust to mitigate
pension rate volatility when CalPERS
investment returns are below the
discount rate or when CalPERS
changes assumptions. The City can
also use it to offset pension costs in
any given year.

The City established a Section 115
Trust to reduce pension rate volatility
when CalPERS investment returns
are below the discount rate or when
CalPERS changes assumptions. The
City can also use it to offset pension
costs.

The fund has a balance of $19.1
million.

Yes
Section 115 OPEB
Trust
In FY 2009-10, the City established a
Section 115 OPEB Trust to help fund
its retiree health obligations, also
known as other post-employment
benefits (OPEB).

The OPEB plan is fully funded.

Starting in FY 2022-23, retiree health
costs will be funded by the OPEB
Trust rather than the General Fund.

The fund has a balance of $34.7
million.

Yes
Capital Projects
Reserve
The General Fund Capital Projects
Reserve may be used to fund capital
projects.

The reserve has a balance of $10
million.

Yes
Economic
Uncertainty Reserve
The General Fund Economic
Uncertainty Reserve may be used to
mitigate potential shortfalls.

The reserve has a balance of $24
million.

No
As of June 30, 2023
1 1
1 FY 2023-24 Adopted Budget
General Fund Financial Schedules
188
Expenditure Reduction Strategies
Potential
Strategy
Description
Potential Impact
Currently
Recommended

No new positions
Cost containment strategy
$0
Yes
Vacancy control
Keep non-essential positions unfilled as they
become vacant.

Approximately
$186,000 per
position on
average
Yes
Employee cost-sharing of
increases to CalPERS
Negotiate to share costs of increases to
CalPERS employer rates with employees.

Would be subject to bargaining unit
agreement.
$250,000
approximate based
on a 5% rate
increase
No
Defer or eliminate
negotiated increases
Would be subject to bargaining unit
agreement.

Approximately
$0.3 million
savings based on a
1% decrease
No
Furloughs
Employees would take up to a 10% decrease
in pay in exchange for 1 unpaid furlough day
per pay period. Would be subject to
bargaining unit agreement.

Approximately $3
million savings
based on a 10%
decrease
No
Reduction in force
Identify positions to be reduced (laid off)
based on MOU provisions and service level
needs.

Approximately
$186,000 per
position on
average
No
Reduction in capital
outlays and special
projects
Cost containment strategy
Up to $4 million
Yes
Reduction in
contingencies
Cost containment strategy
Up to $400,000
Yes
Defer or cancel capital
projects
Cost reduction strategy
Varies
Yes
Reduction of Community
Funding and Historical
Society Funding
Cost reduction strategy
Up to $110,000
Yes
Reduction of festival fee
waivers
Cost reduction strategy
Varies
Yes
FY 2023-24 Adopted Budget
General Fund Financial Schedules
189
Revenue Generation Strategies
Potential Strategy
Description
Potential Impact
Currently
Recommended

¼ Cent Transaction and
Use Tax (TUT)
Voter approval is required
Could increase sales tax from 9.125% to 9.375%
$5.4 million
No
Transient Occupancy Tax
(2% increase)
Voter approval is required
Could increase transient occupancy tax from
12% to 14%
$1.7M @ $10M
base
$1.25M at $7.5M
base
$833k at $5M base
No
Parcel Tax
Voter approval is required
$3.5M flat rate per
parcel
$3.6M variable
rate per SF
No
Other Revenue Tax
Measures
Urban Futures, Inc. (UFI) has been contracted
to analyze potential revenue tax measures.

Varies
No
Increase fees and cost-
recovery
Matrix Consulting Group has been contracted
to conduct a fee study, which is scheduled to
take place from April to July 2023. The study
aims to assess the potential for fee increases
and cost recovery.

Varies
Yes
Sale of City-owned
Properties or Assets
The sale of city-owned assets would generate
one-time revenue.

Varies
No
HdL estimate as of July 2023
Development Revenue Estimates
The City's current forecast does not incorporate potential signiﬁcant development projects that are pending approval and permiHing. However, once new development projects receive approvals and permits, staﬀ will update the forecast accordingly.

The table below shows our best estimates of potential development revenue. These ﬁgures serve as rough approximations and are intended to give you a general idea of what to expect. The timeline for each project represents the Community Development department's best estimate of when commencement is anticipated. It is crucial to note that these estimates are subject to adjustments as we gather additional information over time. 1 1
FY 2023-24 Adopted Budget
General Fund Financial Schedules
190
From: Rhoda Fry
To: City Clerk; City Council
Subject: December 5 2023 "Study Session" increasing sales tax and TOT and PARCEL TAX Date: Thursday, November 30, 2023 4:13:08 PM
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Dear City Council,

Regarding December 5 2023 "Study Session" increasing sales tax and TOT.

SALES TAX
There are 15 cities in Santa Clara County.

Only 4 have higher sales taxes than Cupertino.

If Cupertino were to raise sales tax, it would be among the top third sales-tax rates in our County.

Cupertino would be in the THREE HIGHEST SALES-TAX rates in SANTA CLARA COUNTY.

Please explain how $5.4 million annually could be raised with an additional 0.25% tax.

My understanding is that we are anticipating sales-tax income to dip to $11M.

That means that the gross sales would be $1100M (since $11M sales tax income is derived from 1% of sales).

0.25% x $1100M = $2.75M.

Please explain why I’m figuring $2.75M and the report is figuring $5.4M.

TOT
Strangely, the staff report seems to be less eager to raise the TOT on the basis of Cupertino having a high tax rate than neighboring cities.

Why isn’t the same argument being made for a sales-tax hike? While TOT would not raise as much as sales-tax, I certainly think that it is worth exploring.

When the tax issues began, I spoke with folks from the Chamber of Commerce and a few Hotels, and neither seemed terribly concerned about a TOT hike.

Looking back at some pre-COVID annual reports, there has been a variance of between $6M and $9M of tax collected.

Can you please provide some more data as to the past TOT revenues and anticipated revenues.

I’ve seen quite a range in the City’s Annual reports (ACFR) and I’d like to see more transparency in the staff report as to the assumptions made in revenue generation.

I’d like to hear from the hotels about their take on adding to the TOT.

PARCEL TAX
I am not in favor of parcel taxes because they are regressive as the report stated.

I will be writing about the business tax in a later email.

Thanks,
Rhoda Fry
From: Rhoda Fry
To: City Clerk; City Council
Subject: City Council Public Comment - 12/5/2023 - Information on Sales-Tax Distribution Date: Thursday, November 30, 2023 1:14:04 PM
Attachments: Cupertino Sales Tax Fact Sheet.docx
Letter of support - sales tax - Cupertino.docx
Apple Agreement.pdf
scan_highlasl_2023-11-14-09-05-58.pdf
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Dear City Council and General Public,
I am sending this email so that you can better understand what is going on with our sales-tax situation.

Our City Council is likely aware of first two attachments, however I am attaching them for the general public to understand what Senator Cortese’s office was asking for earlier this year in order to save Apple’s internet sales-tax sharing agreement with Cupertino. The agreement directs all sales taxes on internet sales of Apple goods in California to Cupertino. That’s $1 for every $100 of product purchases. Cupertino then rebates 35% to Apple. In fiscal years 20/21 and 21/22, Cupertino rebated Apple about $14M. That means that Cupertino received about $26M in sales-tax revenue from this agreement. The third attachment should be the most recent version of the agreement.

To learn more about how sales taxes are allocated to cities, I highly recommend watching the following video and reading the last attachment.

This is from the November 15 State Assembly hearing, “Following the Money: How Local Sales Tax Revenues Are Allocated Among California Cities.” You can watch the video here – the video starts just before minute 31. https://www.assembly.ca.gov/media/assembly-revenue-and-taxation-committee-20231115 Regards,
Rhoda Fry
Protecting Critical Revenues for Local Public Services and Safety

BACKGROUND
A major force changing the sales tax system is increased online (remote) purchasing by consumers and businesses alike, particularly from ‘all online’ companies with little to no brick and mortar (storefront) presence. Unsurprisingly, online shopping skyrocketed during the COVID-19 stay-at-home orders.

In 2018, the United States Supreme Court decided South Dakota v. Wayfair. Wayfair expanded how states can tax sales of goods to California buyers by out-of-state businesses and sellers over the internet.

The Legislature rightfully updated state law (AB 147;2019; Marketplace Facilitator Act) to match the modern economy with the added fiscal benefit to the state and its local governments. The law also advances California’s position as the hub of technology and innovation.

Since Wayfair, the Marketplace Facilitator Act treats online platforms (now called Marketplace Facilitators) as “retailers” for purposes of state and local sales and use taxes and requires them to pay sales tax.

Local governments have begun to rely on these revenues to provide basic and critical services. Importantly, these revenues were key to ensuring cities could prevent major service cuts and layoffs during the height of the COVID-19 pandemic because of the capturing of online sales revenues.

PROBLEM
In 2021, CDTFA issued updated guidance on local tax reporting for online retailers without clear discretion to do so by the Legislature. In this guidance, the department purported to ‘clarify’ the definition of “participation” in a sale which determines which local governments receive the online sales tax revenue.

CDTFA insists that retailers must engage in “genuine physical human interaction” with every sale at a California place of business to be subject to sales taxes – despite the significant physical footprint of a company within a jurisdiction – a position that rests an out-of-date, decades old policy that is not suitable for the current landscape of online shopping.

Furthermore, the Legislature has never adopted such a rule, and the CDTFA’s own regulations state that participation in the sale in any way by a retailer’s California place of business is sufficient to trigger the sales tax.

Following this guidance, CDTFA has begun to audit and issue historic notices sales tax reallocation away from cities with online retailers that have in their view ‘improperly reported’ sales tax revenues based on ‘participation’ criteria.

This change has severe consequences to the services and labor forces of impacted cities, all without clear direction from the legislature or Administration.

This ex-post-facto regulation threatens the viability of public services, public sector jobs and the ability of state to keep major retailers from relocating to competitor states.

SOLUTION

While final determinations on the proper allocation of online tax revenues will take several years, which may be prolonged by litigation, the impacted local governments should be allowed to maintain the revenues received under current law:

• Prevent redistribution of pre-2023 revenues.
• Protect local revenues derived from online retail sales until 2035 .

This fix will provide fiscal certainty to the cities, their labor forces, and state programs contingent on local funds (incl. homelessness programs)– otherwise, these funds will be ‘lost’ and ‘locked’ until final determinations are made in several years.

The proposed changes to section 7209 of the Revenue and Taxation Code will ensure that the affected cities will be allowed to maintain millions in general sales tax revenue including funds received prior to the CDTFA’s notice of proposed redistribution that were spent serving the critical needs of the community during the COVID-19 pandemic.

This approach does not undermine the ongoing audits and lengthy legal process that will ensue between CDTFA and affected cities. Rather, while those disputes are resolved, local governments will continue to provide critical public services – including housing and homelessness programs, 911 and fire response, parks and libraries.

Importantly, none of the proposed changes impact sales tax revenues allocated to the state general fund or county realignment funds used for public safety and mental health programs.

Letterhead

August 16, 2023

The Honorable Gavin Newsom
c/o Christy Bouma
1021 O Street, Suite 9000
Sacramento, CA 95814

Re: Protecting Critical Revenues for Local Public Services and Safety

Dear Governor Newsom

I am writing to request an urgent amendment to California’s Revenue and Taxation Code that will protect the financial health of, and ensure the maintenance of vital services by, local governments in Santa Clara County.

The rise of online purchasing has dramatically altered the state’s sales tax landscape. The United States Supreme Court’s 2018 decision in South Dakota v. Wayfair allowed California to tax sales of goods to California consumers over the internet when the sales are made by out-of-state businesses. The Legislature promptly updated state law in 2019 – through AB 147, the Marketplace Facilitator Act – to adapt to this new constitutional rule and ensure that large online retail platforms ensure the prompt payment of all taxes due.

Local governments in Santa Clara County rely on the new revenues generated from online sales taxes to provide essential services. These revenues also played a pivotal role in preventing service cuts and layoffs during the challenging times of the COVID-19 pandemic, offering a lifeline to our communities when they needed it most.

However, recent guidance issued by the California Department of Tax and Fee Administration (CDTFA) on local tax reporting for online retailers has raised significant concerns. The CDTFA’s regulations state that, to trigger sales tax, a California office of the retailer must participate in the sale “in any way.” The CDTFA is now insisting that to qualify as “participation,” there must be “genuine physical human interaction” with the sale at a California office – a test that makes little sense in a world where sales processes are increasingly automated.

The CDTFA’s new approach to online sales is not in line with the Legislature’s intentions, it is inconsistent with the CDTFA’s own regulations, and it poses a serious threat to the revenues local governments depend on.

Relying on its proposed “genuine physical human interaction” rule, the CDTFA has initiated audits and issued notices to reallocate sales tax revenue away from cities that are home to online retailers and from Santa Clara County itself, leading to uncertainty and potential financial hardships for the communities these governments serve. The lack of clear direction from the Legislature and the Administration only exacerbates the situation and leaves local governments struggling to maintain critical public services and retain valuable public sector jobs.

Therefore, I urge you to consider the proposed solution outlined below to address the current challenges created by the CDTFA’s actions and to provide fiscal certainty to the affected cities and to Santa Clara County:

1. Prevent redistribution of pre-2023 revenues:

Ensure that sales tax revenues received by governments prior to 2023 are not subject to redistribution.

2. Protect local revenues derived from online retail sales until 2035:

Allow impacted governments to maintain revenues generated from online sales until January 1, 2035.

Implementing these changes will maintain the fiscal health of the affected cities and Santa Clara County and protect their labor forces and state programs reliant on local funds, including critical homelessness programs.

I request that Revenue and Taxation Code 7209 be amended to add the following:
(b) With respect to any city in the County of Santa Clara, the board shall continue to distribute to that city, and shall not redistribute to any other city or to any county, all tax that a retailer has remitted for distribution to the city prior to January 1, 2035, if the amount the retailer remitted for distribution to the city exceeds three million five hundred thousand dollars ($3,500,000) per quarterly period. The board shall also continue to distribute to the County of Santa Clara all tax remitted for distribution to the County by the same retailer prior to January 1, 2035, and it shall not redistribute that tax to any city or to any other county. For purposes of this subdivision, the term “retailer” includes a marketplace facilitator that is considered a retailer under Section 6043.

The revenues previously received by the affected cities have been instrumental in serving the needs of the community during the COVID-19 pandemic, and preserving the revenues that will be received moving forward will ensure continuity in providing essential services such as housing and homelessness programs, emergency response, county transportation programs, and support for public facilities such as parks and libraries.

It is important to note that these proposed changes will have no effect on sales tax revenues allocated to the state general fund or to county realignment funds designated for crucial public safety and mental health programs.

Moreover, the proposed changes will not forestall future attempts to resolve the underlying dispute with the CDTFA; the CDTFA may address the Wayfair decision and the Marketplace Facilitator Act through the notice and comment rulemaking process, with input from interested parties, and any regulations it might issue – if upheld in court – will apply to the affected cities and Santa Clara County when the proposed amendment to section 7209 expires. And the Legislature, of course, remains free to address these issues directly, at any time.

By protecting critical revenue, we can ensure the stability of our local governments and that California remains at the forefront of technology and innovation while continuing to support the essential needs of our citizens.

Thank you for your time and consideration on this matter.

Sincerely,

Cc Senator Dave Cortese

EXTENSION OF
AGREEMENT FOR CONSULTATION SERVICES

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OAK #4834‐4562‐8437 v5
Reference is made to (A) the Agreement for Consultation Services (the “Consultation Agreement”), executed in 2007, by and between ACI Holdings, Inc., a California corporation, subsequently renamed Baz Industries, Inc. (the “Consultant”), and the City of Cupertino (the “City”), as in effect immediately prior to the Extension Effective Date (as hereinafter defined) of this Extension of Agreement for Consultation Services; and (B) the Development Agreement, dated as of November 19, 2013 (the “Development Agreement”), by and between Apple Inc. (“Apple”), and the City, as in effect on said Effective Date. In connection with and pursuant to the provisions of the Development Agreement, the parties thereto have agreed that the Consultation Agreement shall be extended pursuant and subject to the terms and provisions of this Extension of Agreement for Consultation Services (this “Extension”). For good and valuable consideration, the receipt and sufficiency of which are hereby affirmed and acknowledged, the Consultant and the City agree as follows:

1. Effective Date and Interim Extension.

Except for any interim extension of the Consultation Agreement provided for in this paragraph 1 (which shall become effective without regard to the Extension Effective Date, as defined in this paragraph 1), this Extension shall become effective only upon the occurrence of the “Effective Date” of the Development Agreement (as defined therein) and the expiration of any litigation challenging the Development Agreement and the Project Approvals (as defined therein) without any litigation pending and with the Development Agreement and Project Approvals then being in full force and effect (the “Extension Effective Date”); provided, however, that if the Extension Effective Date has not occurred on or before February 19, 2014 (being the stated expiration date in the Third Extension of Agreement for Consultation Services heretofore executed and delivered by the City and the Consultant), then without further action by either the City or the Consultant, the Consultation Agreement as previously extended shall not expire and shall continue in full force and effect in accordance with its existing terms until the earlier of the Extension Effective Date or March 1, 2015. For all purposes of this Extension (including without limitation any interim extension of the Consultation Agreement preceding the Extension Effective Date), in the event of any conflict between any provision of this Extension and any provision of the Consultation Agreement, the provisions of this Extension shall control and supersede such provision of the Consultation Agreement.

2. Compliance with Law and Development Agreement.

The terms and provisions of this Extension shall be performed, observed and administered in compliance with: (a) the laws and regulations of the State of California, including without limitation the provisions of the Bradley‐Burns Uniform Local Sales and Use Tax Law; and (b) the terms and provisions of the Development Agreement, as it may be amended from time to time. Neither the City nor the Consultant shall take or omit to take any

action that, if taken or omitted, would cause all or any portion of the Consultation Agreement or this Extension to be determined legally invalid. For all purposes of the preceding sentence, acts or omissions to act by the Apple shall be deemed acts or omissions to act by the Consultant.

The parties recognize that the California State Board of Equalization (the “SBOE”) may notify the City of any proposed reallocation of sales and use tax revenues relating to Apple’s designation of the City as the point of sale. Should the SBOE notify the City of any proposed reallocation of Apple’s sale and use tax revenues away from the City to other government entities, the City shall give the Consultant prompt notice of the City’s receipt of any such notification from the SBOE. Upon being so notified, the Consultant will promptly repay to the City any such proposed reallocated funds that were paid to Consultant under the Consultation Agreement or this Extension (“Repayment Amount”), and the City shall place the Repayment Amount into a third‐party escrow account. The City and the Consultant shall cooperate in any effort to avoid, reduce or nullify any such reallocation. If the SBOE concludes through its administrative process that the City must repay such tax revenues to the SBOE (or the SBOE withholds tax revenues otherwise payable to the City in lieu of any City repayment to the SBOE), the parties agree that the Repayment Amount shall be released to the City in order for the City to satisfy the SBOE’s reallocation or to reimburse or replace City funds expended for such reallocation or withheld from the City by the SBOE for such reallocation. If the SBOE or another entity with jurisdiction ultimately nullifies or reduces the SBOE’s proposed reallocation, the City shall return to the Consultant all funds held in escrow (or funds equal to the amount of the original allocation permitted) plus any interest actually earned on such funds from the date of deposit until the date of refund.

3. Compensation.

From and after the Extension Effective Date, and notwithstanding the provisions of paragraphs 2(c), 2(d) and 2(e) of the Consultation Agreement, for each Fiscal Year of the City, all compensation to the Consultant in excess of $62,500 (which shall be paid by the City to the Consultant with respect to new local tax revenue not less than $250,000) shall be in an amount equal to 35% of such revenue in excess of $250,000. If the Extension Effective Date occurs after the commencement of any fiscal quarter of the City (currently July 1, October 1, January 1 and April 1), then the percentage specified in the preceding sentence shall become applicable as of the commencement of such fiscal quarter of the City.

4. Term.

From and after the Extension Effective Date, the term of the Consultation Agreement shall end at the close of the next full fiscal quarter following the fiscal quarter in which the Development Agreement termination occurs for any reason, unless otherwise agreed by the City and the Consultant in writing pursuant to the provisions of paragraph 6 of this Extension.

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5. Fiscal Year.

For all purposes of the Consultation Agreement and this Extension, each “Fiscal Year” of the City shall begin July 1 of each calendar year and end June 30 of the succeeding calendar year.

6. Integration Clause; Modification of Agreement.

From and after the Extension Effective Date, the Consultation Agreement, as modified by this Extension, shall contain the entire understanding of the City and the Consultant related to the subject matter of the Consultation Agreement and this Extension. No oral agreements, understandings, promises made by the parties or their agents which are not contained in the Consultation Agreement or this Extension are binding. Neither the Consultation Agreement nor this Extension may be modified except by a written agreement executed by both parties.

IN WITNESS WHEREOF, the Consultant and the City have executed this Extension by their duly authorized representatives, on the dates set forth below, to be effective as provided above.

BAZ INDUSTRIES, INC., a California corporation
(previously named ACI Holdings, Inc., the
“Consultant”)

Date: By:

Gene Levoff, Secretary

CITY OF CUPERTINO, a municipal corporation
(the “City”)

Date: By:

David Brandt, City Manager

Date: By:

Grace Schmidt, City Clerk

APPROVED AS TO FORM:

By:

Carol Korade, City Attorney

From: Kitty Moore
To: Pamela Wu; City Clerk; Kirsten Squarcia
Cc: Matt Morley
Subject: Re: Dec 5 Study Session Item 1 Staff Questions also submitted for Written Communications Date: Monday, December 4, 2023 6:54:05 PM
Attachments: SalesTaxReformOptions150406.pdf
Hi,

I have met with staff and UFI today and have edited my Staff Questions and Written Communications (redlined) below. Please include the revised items for the Written Communications.

Thank you,

Kitty Moore

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389
From: Kitty Moore <[email protected]>
Date: Monday, December 4, 2023 at 7:07 AM
To: Pamela Wu <[email protected]>, City Clerk <[email protected]>, Kirsten Squarcia <[email protected]>
Cc: Matt Morley <[email protected]>
Subject: Dec 5 Study Session Item 1 Staff Questions also submitted for Written Communications
Hi,

The following questions/comments and the attached file are regarding Item 1 of the December 5 Study Session for Staff and submitted for Written Communications (including the attached file):

Thank you for providing the revenue generating strategies for Tax Measures.

Attached please find the Budget Balancing Strategies from FY 21-22 which has more data estimates and the Vallco/Rise Plan check fee estimate.

Question 1:

Question 2:

Question 3:

In FY 21-22 the TUT increase was estimated at $4M and this year it is estimated at $5.4M when the total Sales Tax is estimated at $9M. I suggest that this estimate be reviewed and revised significantly downward, and please provide the calculation assumptions. If we are currently at $9M, receiving 1%, increasing to !.25% will not bring in over 50% more sales tax revenue (the $5.4M). Please also explain what purchases we make which will have this increase (when we buy online, in person in Cupertino, etc.). Thank you for the informative meeting with Staff and UFI today, December 4, 2023. If I understand correctly, the $5.4M TUT is correct given approximately $2B in sales with destination/use within Cupertino is estimated. Is this correct? SUT is based on the point of sale which CDTFA has challenged for a major sales tax revenue generator, the point of sale (SUT) is determined in a completely different way from the destination/use (TUT). What do each of the Santa Clara County cities have as their TUT? Has the city considered advocating for Bradley Burns reform? http://californiacityfinance.com/SalesTaxReformOptions150406.pdf

Question 4:

At the previous Council meeting, the 4
th of July fireworks were canceled to save approximately $140k without looking at Budget-Balancing Strategies as a whole which would be a combination of Revenue and Expenditure modifications. This Study Session contemplates only taxing the community. Are we going to have a meeting discussing a more holistic approach to Budget Balancing and/or provide a recap of what has been done so far?

Question 5:

Thank you,

Kitty Moore

Image removed by sender.

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389
Image removed by sender.

Image removed by sender.

CaliforniaCityFinance.Com
Evaluating Some Options For Sales Tax Reform
At its January 16, 2015 meeting the League’s Revenue and Taxation Policy Committee heard a presentation on the sales and use tax and directed staff to return with specific ideas for reform. The presentation followed a year- long study by a League Task force on the sales and use tax. The Task Force examined the issues including:
 the accelerating decline and concentration of local sales tax revenues,  changes in demographics, purchasing behavior, and technology;  tax rates and application to various categories of goods and services in other states;  the use of tax rebates,
 tax sourcing rules (definition of the location of sale for purposes of determining tax rate and distribution)  the distribution of pooled revenues.

The group also discussed a number of ideas for reform related to these issues and gathered input from technical experts in the field of municipal taxation including staff at Muniservices LLC and HdL Companies.

This report summarizes the issues, describes pertinent policies and principles to guide decisions on possible reforms, and examines various reform ideas in light of these principles.

I. The Problems
A. Weak Growth In Revenues, Below The Pace of Population Growth and Inflation Sales and use tax (SUT) revenue collections do not keep pace with growth in the economy or with inflation and population growth. This is largely due to two things:
1) Growth in the economy and consumer spending has been stronger in areas which are generally not taxed in California. The cost of services, which are generally not taxed, has generally increased at a higher rate over time than the cost of goods.

217 Isle Royale Lane • Davis, CA • 95616-6616
hone: 530.758.3952 • Fax: 530.758.3952
6 April 2015

Sales and Use Tax Reform Proposals – 2 – 6 A p r i l 2 0 1 5

CaliforniaCityFinance.com
2) A growing portion of previously taxable goods are now being provided digitally and in that form are generally not taxed. Examples include music, videos and computer software.

B. Concentration of Revenues and Leakage Through Rebate Agreements There has been and alarming increase in arrangements to encourage certain land use development with rebates and incentives which exploit California’s odd origin sales tax sourcing rules. This has resulted in the concentration of sales tax revenues in a few jurisdictions at the expense of many many others. It has resulted in the diversion of sales tax revenues away from the provision of important public services in amounts far in excess of any conceivable economic benefit.

In the typical arrangement, a city provides tax rebates to a company that agrees to move or expand their operations in the jurisdiction of the city. The expansion may be little more than an order desk. Under such an arrangement, the company generally agrees to make a specified amount of capital investment and create a specific number of jobs over a period of years in exchange for specified tax breaks, often property tax abatement or some sort of tax credit. In some cases, this has simply taken the form of a sales office, while customers and warehouses and the related economic acti vity are disbursed elsewhere in the state. In some cases the development takes the form of warehouses, in which the sales inventory, owned by the company, is housed.

Current sales tax incentive agreements in California re bate amounts ranging from 50% to 85% of sales tax revenues back to the corporations. Today, experts familiar with the industry believe that between 15% to 20% of local Bradley-Burns sales taxes paid by California consumers is diverted from local general funds back to corporations; over $1 billion per year.
1 1 There is no comprehensive list of sales tax rebate agreements, but this estimate is based on the close understanding of current rebate agreements consultants involved with sales tax collection analysis for local governments. Twenty percent of the current $6 billion annual 1% local Bradley Burns rate is $1.2 billion.

Sales and Use Tax Reform Proposals – 3 – 6 A p r i l 2 0 1 5

CaliforniaCityFinance.com
C. Revenues Reported to County Pools Are Not Fully Allocated On The Situs of Transactions From Which They Come
Sales tax revenues in a countywide pool are allocated among the local agencies in that county in proportion to other taxable sales. That is, regardless of the particular jurisdiction in a county where a taxable product is received or used, the revenues are distributed among all based on the proportion of other taxable sales. Why do we do it this way? Historically, for ease of administration for the BOE and taxpayers. But this method does not reflect the true economic activity or public service impacts associated with the use of the product, a fact implicitly recognized in existing regulations which provide that revenues from purchases in excess of $500,000 in value be sourced to the location of first use. Today, technology is vastly more sophisticated than twenty or thirty years ago such that the administrative ease justification seems weak.

II. Guiding Principles
A. League of California Cities’ Policies and Guiding Principles The League’s Policies and Guiding Principles2 provide us a framework for evaluation as we consider these and other ideas. Pertinent to this issue are the following:
1) Revenue from new regional or state taxes or from increased sales tax rates should be distributed in a way that reduces competition for situs-based revenue . (Revenue from the existing sales tax rate and base, including future growth from increased sales or the opening of new retail centers, should continue to be returned to the point of sale.) 2) The existing situs-based sales tax under the Bradley Burns 1% baseline should be preserved and protected. Restrictions should be implemented and enforced to prohibit the expansion of questionable businesses formed to circumvent the principle of situs-based sales and used to divert sales tax revenues from other regions in return for favorable treatment. 3) Cities and the League should continue to emphasize efficiency and effectiveness, encouraging and assisting cities to achieve the best possible use of city resources. 4) Revenues should be logically linked to traditional and emerging responsibilities. 5) To preserve local authority and accountability for cities, state policies must … ensure the integrity of existing city revenue sources for all cities , including the city share and situs allocation, where applicable, of property tax, sales tax, vehicle license fees, etc.

2 See “League of California Cities, Summary of Existing Policy and Guiding Principles” Revenue and Taxation section.

Sales and Use Tax Reform Proposals – 4 – 6 A p r i l 2 0 1 5

CaliforniaCityFinance.com
B. Guiding Principles from Other Local Government Fiscal Reform Efforts In my review of prior reform issues and efforts in the area of local and state government finance in California, I offer four broad principles to guide proposed solutions:3  seek greater fiscal stability and local choice;
 better match local government revenues with local public service costs;  improve transparency and simplicity to residents, taxpayers and customers;  avoid harmful effects on individual agencies and groups.

I offer one more, a paraphrase of an aphorism attributed to Voltaire:
 “Don’t let the perfect be the enemy of the good.”

III. Some Reform Ideas
A. Expand Taxable Sales to Include Areas Commonly Taxed In Other States Mazeroff (2009) offers the following benefits to expanding the sales tax base to include services:
 Taxing additional services can generate substantial new sales tax revenue. Broadening the tax base could substantially increase revenues.

SOURCE: Based on a memorandum from California State Board of Equalization Member Judy Chu April 2008

 Taxing services broadly is essential if the long-run revenue adequacy of the sales tax is to be maintained. Household spending has been shifting from goods to services for decades. Largely to compensate for this trend, states have increased sales tax rates.  Bringing services into the sales tax base may reduce the year-to-year volatility of sales tax collections. Research suggests that including more services in the sales tax base could moderate the volatility of sales tax revenues over the course of the business cycle.

3 See Multari, Coleman, Hampian and Statler, “Guide to Loca l Government Finance in California” 2012 Solano Press Books, Chapter 17, page 237.

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CaliforniaCityFinance.com
 Expanding the taxation of services will make the sales tax fairer. The sales tax is intended to be a general tax on consumption. There is little reason to distinguish between consumption of goods and consumption of services, which in fact can be substitutes for one another. For example, it is not equitable — it violates the principle of “horizontal equity” — to tax the person who rents a videotape but not the person who watches a pay-per-view movie on cable TV.  Imposing a sales tax on services can improve the allocation of economic resources. Taxing goods but not services creates an artificial incentive to purchase services rather than goods.  Expanding the taxation of services can simplify the process of administering and complying with the sales tax. If all of a retailer’s sales, rather than just the non-labor portion, are subject to tax, many accounting burdens and disputes diminish or disappear.

Taxation of Digital Sales in the States (2012)
Source: Mazerov (2012)

Sales and Use Tax Reform Proposals – 6 – 6 A p r i l 2 0 1 5

CaliforniaCityFinance.com
Specific reform ideas:
 Expand taxable sales to include products delivered in digital form. California’s SUT laws were enacted in the 1950s and could not have contemplated the digital economy of today. Increasingly, products including books, music, games, movies and software are sold in digital form over the Internet. Unlike twenty-three other states including Texas, Idaho, Utah, and Washington, California has not updated its SUT law to cover goods and services sold and de livered digitally even though these states tax the sale of identical items sold in physical stores. The lost revenue is in excess of $150 million per year and growing, including over $130 million from the 7.5% base composite statewide rate. Bradley Burns 1% losses are about $18 million per year.
4  Expand taxable sales to include recreation and entertainment. Most other states that impose a sales tax include most sales of recreation and entertainment as taxable. In most cases, the vendors providing these services already have sales tax permits and are collecting and remitting sales and use tax revenues on taxable goods. This will help mitigate the administrative cost to the vendors and the BOE of such a change. The BOE costs would netted out of the state and local revenues they collect.

4 Based on Mazerov’s 2012 collection estimates for nine states, adjusting for rates and populations.

Amusement /
entertainment /
recreation
Home repair /
installation /
maintenance
Personal property
repair / installation
/ maintenance
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CaliforniaCityFinance.com
The foregone sales tax revenue in California from not taxing these categories exceeds $300 million per year including nearly $50 million to the local Bradley Burns 1% rate.5 Recreation and Entertainment Not currently Taxed in California  Professional sports
 Amusement parks
 Cultural events
 Circus / fairs
 Bowling alleys
 Video, billiards
 Marina services
 Health clubs
 Private club memberships
 Expand taxable sales to cover maintenance and repair services . Repair and maintenance services are commonly defined as taxable sales in most other states that impose a sales tax. Providers of these services in California are typically already collecting and remitting sales and use tax revenues on taxable goods (e.g., parts, materials, etc.), but not on the labor portion of the transaction. The foregone sales tax revenue in California from not taxing these catego ries exceeds $1.6 billion per year including over $250 million to the local Bradley Burns 1% rate.
6 Maintenance and Repair Services Not Currently Taxed in California  Carpet and upholstery cleaning
 Extermination
 Landscaping and yard care
 Swimming pool maintenance and cleaning
 Building repair or remodeling (including
plumbing, electrical, flooring, etc.)
 Automobile repair, installation, washing,
rustproofing
 Appliance repair or installation (incl. TV,
sound systems, kitchen appliances, etc.)
 Garment or shoe repair or alteration,
 Laundry/dry cleaning
 Eliminate the sales tax exemption for candy, snacks and bottled water . California, like most states, exempts food products from taxable sales. Unlike many other states, California also exempts, candy, confectionary and snack foods and bottled water. The BOE estimates this exemption results in the loss of $1.3 billion annually in sales and use tax revenues to governments including $120 million per year in city/county local Bradley Burns sales tax and over $100 million in local add-on transactions and use taxes.  Eliminate the sales tax exemption for custom computer programs. Customized computer programs are non-taxed service, unlike “off-the-shelf” computer programs if delivered in tangible form (i.e. not digital). The BOE estimates that governments in the California lose about $400 million annually from this exemption, including about $50 million per year in city/county local Bradley Burns sales tax and over $42 million in local add-on transactions and use taxes.  Tax reduction offset. The sales tax rate could be reduced to mi tigate, all or in part, the initial revenue impact of expanding what activities are taxable. A 0.25% reduction is roughly equivalent to $1.6 million annually at present. A 0.1% reduction is roughly equivalent to $640 million. However, there are complications with this. The Legislature is constitutionally prohibited from reducing some components of the sales and use tax including: the 1% local Bradley Burns general rate, 7 the 0.25% Bradley Burns

5 Based on Mazerov (2009), BOE (2010)
6 Based on Mazerov (2009), BOE (2010)
7 Proposition 1A, Cal Const Art XIII Sec 25.5 (a)(2)
Sales and Use Tax Reform Proposals – 8 – 6 A p r i l 2 0 1 5

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county transportation rate,8 the 0.5% Proposition 172 public safety rate, 9 the 0.5% and 1.0625% local realignment fund rates,10 and any of the voter approved local transactions and use tax rates (add-on sales taxes).11 Revenue gains from an expansion would occur for all of these rate categories, but an offsetting rate reduction could only be enacted on the 3.9375% state general fund rate. Consequently, a reduction that fully offsets the revenue increase would produce a revenue decrease to the state general fund.

B. Strictly Limit or Eliminate New Sales Tax Rebate Agreements  Eliminate SB27 loophole for impacts on revenues from pools. The last sentence of Government Code Section 53084.5 (a)(1) allows a rebate agreement even if it results in a reduction of revenues to other agencies if those reductions occur from a countywide pool. A retailer’s change from collecting and reporting use tax into county pools to sales tax does not justify a rebate agreement.  Eliminate SB27 loophole for impacts on revenues where a retailer is expanding operations. The last sentence of Government Code Section 53084.5 (a)(2) allows a rebate agreement when there is an expansion of the retailer’s operations with the result that the retailer is conducting a comparable operation in both jurisdictions. Eliminating this loophole would of course not prevent such expansions but it would not allow this to enable rebate agreement.  Eliminate SB27 loophole for impacts on revenues related to reimbursement to a retailer for public works improvements. Government Code Section 53084.5 (c). Eliminating this loophole would of course not prevent the reimbursement of retailers for public works improvements. But such reimbursement could not come in effect at the expense of other agencies via a rebate agreement.  Eliminate SB27 loophole for impacts on revenues related to a “buying company.” Government Code Section 53084.5 (d) allows a rebate agreement when there is a buying company involved. Eliminating this loophole would of course not prevent the establishment or use of buying companies but it would not allow this a justification for a rebate agreement.
 Eliminate SB27 loophole for impacts on revenues in cases where there is a use tax direct payment permit involved. (Government Code Section 53084.5 (e)). Eliminating this loophole would of course not prevent these use tax direct payment permits but it would not allow a rebate agreement in such a circumstance.

C. Reduce The Leakage of Local Sales Tax Revenue Under Existing Agreements  Redefine sales tax sourcing rules to destination instead of origin. Under California’s current origin based sourcing rules, retail sales are generally sourced to the local jurisdiction of the retailer’s place of business and where the principal sales negotiations took place. Under destination based sourcing, sales are instead sourced to the jurisdiction where the purchaser receives the property, if the information is

8 Proposition 1A, Cal Const Art XIII Sec 25.5 (a)(2)
9 Proposition 172, Cal Const Art XIII Sec 35
10 Proposition 30
11 Proposition 1A, Cal Const Art XIII Sec 25.5 (a)(6)
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available to the retailer at the time of sale. If the location where the purchaser takes possession of the property is not known by the seller, alternative methods to source the tax include (in order):
• the location indicated by delivery instructions known to the seller, • the location indicated by the address of the purchaser available in the seller’s records, • the location of the purchaser’s payment instrument, or • the location from which the property is shipped.

 Alternative: phase in destination rules over time to arrive at a split of the source between the origin and the destination locations. For example: on July 1, 2017, 25% destination and 75% origin; on July 1, 2020, 50% destination and 50% origin; and on July 1, 2023, 75% destination and 25% origin.

D. Reduce Pools, Send Revenues to Specific Location of Economic Activity  Redefine the sourcing rules for all use tax transactions to specify the location of product receipt (destination) is the specific jurisdiction, not the county, unless it is not reasonably possible to determine.

Current Board of Equalization regulations provide that the use tax from taxable transactions of $500,000 or more by out-of-state retailers who are engaged in business in California is allocated to the jurisdiction in which the first functional use of the property occu rs. This is generally deemed to be the jurisdiction to which the goods are shipped. Use tax revenues from transactions below this threshold are reported to pools and then disbursed among jurisdictions based on the share of other taxable sales.

 Alternative: Reduce the pool threshold from $500,000 to $10,000 (or some amount).

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ADDENDUM: Excerpt from “Guide to Local Government Finance in California”

Principles of Local Government Fiscal Reform
from Multari, Coleman, Hampian and Statler, “Guide to Local Government Finance in California”

Enhance Fiscal Stability and Local Choice. The efficient and effective delivery of public services requires reasonable durability and stability of fiscal resources. It also requires flexibility for lo cal policy makers to make choices, including the reallocatio n of resources to meet changing needs. Improvements to the local fiscal system should:

 Increase “local control,” the ability of local governments to respond effectively and efficiently to local public service priorities and needs of their residents, property owners, businesses and civic institutions.  Stabilize and protect local government revenues and prevent mandated responsibilities from capricious actions by the State.  Improve the efficiency, effectiveness and responsiveness of loca l government by consolidating finances, roles and responsibilit ies and increasing the ability of cities and counties to decide the allo cation of public revenues, and how and what municipal services they will provide.
 Provide sufficient fiscal resources to underfunded local governments.  Enable and encourage intergovernmental cooperation, consolidation and improvement.  Establish a local fiscal system that is sustainable, and that can respond to evolving economic conditions and local public service needs.

Match Local Government Revenues wi th Local Public Service Costs. When the demand for local public services expands due to development and population growth, local fiscal resources need to grow in tandem. Improvements to the fiscal system should:

 Provide a responsive palate of revenues that grows concomitantly with service demand so as to minimize the need for restructuri ng or tax increases except to enhance service levels.
 Provide sensible incentives for desired land uses that may not generate high revenues, such as affordable housing or open spaces.  Avoid incentives that encourage cities and counties to overemphasize certain land uses, such as retail development, at the cost of well- balanced communities.
 Consider tax deductibility, so that the structure of state and local taxes causes the federal government to shoulder a greater share of public service costs and provide tax relief and/or service improvements.

Improve Transparency and Simplicity to Residents, Taxpayers and Customers. The local fiscal system is extremely complicated.

Unnecessary complexity wastes resources and creates distrust. Improvements to the fiscal system should:

 Enhance the transparency of where taxes, fees and other funds are allocated and spent, making the system more understandable, accessible and less complicated.
 Minimize administrative bureaucracy and costs while providing sufficient systems to assure accountability and to measure the efficiency and effectiveness of public service delivery.

Avoid Harmful Effects on Individual Agencies and Groups. In almost any fundamental change to the local fiscal system there will be some agencies and individuals that will be better and some worse off. This is the “winners and losers” challenge of reform. Improvements to the fiscal system should endeavor to minimize or mitigate the impact of changes on institutions and individuals.

California communities and the public agencies that serve them are diverse in service needs, in philosophy, and in the structur e of their finances. Changes to the system should allow for local flexibility and choice and avoid “one size fits all” solutions.

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ADDENDUM: Countywide and Statewide Pools in California Under current California State Board of Equalization regulations, a substantial portion of local use tax collections are allocated through a countywide pool to the local jurisdictions in the county where the property is put to its first functional use. The state and county pools now constitute over 15% of local sales and use tax revenues.

Under the pool system, the tax is reported by the taxpayer to the countywide pool of use and then distributed to each jurisdiction in that county on a pro-rata share of taxable sales. If the county of use cannot be identified, the revenues are distributed to the state pool for pro-rata distribution on a statewide basis.

BOE rules call for the use of these pools rather than sending the revenue to the jurisdiction of first use despite the fact that - in most cases now - transactions include a district tax component which is allocated not to any pool, but to the specific jurisdiction. For example, Amazon collected an 8% rate on my purchase of a book last week, the total rate in my hometown. This includes a 0.5 percent rate, the add-on transactions and use tax (district tax) allocated to my city. But the Bradley Burns one percent portion of the tax I paid goes into the county pool and is shared among all cities and the county. Under destination sourcing rules, that local one percent would be allocated to the city, a stronger move toward true situs allocation.

The largest components of these pools are from:

 Private party sales of vehicles, vessels and aircraft registered at the Department of Motor Vehicles, and mobile homes reported by the Department of Housing and Community Development.
 Private party sales of vessels (not required to register with the DMV) and aircraft purchases.
 Use tax paid by contractors who are considered consumers of materials purchased without tax, but used by the contractor in the improvement of real property, and whose job site is regarded as the place of business.  Merchandise shipped directly to consumers by common carrier from inventory located outside the state with the title passing out of state.
 Long term leases of tangible personal property except long term leases of motor vehicles (see below).  Catering trucks, itinerant vendors, vending machine operators and other permit holders who operate in more than one local jurisdiction and are unable to readily allocate taxable transactions to specific points of sale.  Use tax on purchases consumed at non-selling facilities (research and development, for example.)  Use tax on motor vehicle leases negotiated by out-of-state leasing companies.

State law does provide special allocation procedures for use taxes collected on certain products. Generally, these special allocation rules allow use tax revenue that would otherwise be shared via the countywide and statewide pools to be directly allocated to the jurisdiction of use. These include:
• Jet Fuel: The sales tax on jet fuel generally goes to the jurisdiction where the fuel is pumped into the aircraft. • Long Term Leases of Motor Vehicles (greater than four months) : Sales tax from rentals of equipment and vehicles is allocated to the jurisdiction where the rental company is located. Rentals exceeding four months or longer are considered long term leases. When the leased vehicle is either purchased from a California dealer or leased by a California dealer-lessor, the tax is allocated to the place of business of the dealer or lessor. If the leased vehicle comes from an out-of-state source, the tax is allocated through the county-wide use tax allocation for the county in which the vehicle is registered.

Revenue from the Pool: An
Example
A city generating 4% of all
taxable sales in a given
c ounty r eceiv es 4% of the
pool.

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• Auctioneers conducting auction events at locations other that their regular place of business when the taxable sales total $500,000 or more: The local tax is to be allocated to the jurisdiction in which the auction occurs. • Construction Contracts equal or greater than $5,000,000 . Construction contractors have the option to allocate use tax on materials consumed and fixtures furnished directly to the jurisdiction where the jobsite is located if the sales or purchase value exceeds $5 Million. The Board of Equalization will not allocate to the jobsite if a sub permit for the location is not taken out prior to commencement of the project. • Sales and Purchases of $500,000 or More Subject to Use Tax. Use tax from transactions by out-of-state retailers who are engaged in business in California is allocated to the jurisdiction in which the first functional use of the property occurs. This generally is deemed to be the jurisdiction to which the goods are shipped.

mjgc

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ADDENDUM: Destination Sourcing12
A change from origin sourcing rules to destination sourcing rules for the local tax component of California’s sales tax would improve overall revenue collections and distribute these revenues more equitably among all of the areas involved in these transactions.

A change from origin based sourcing to destination based sourcing would have no effect on state tax collections.

However, it would alter the distribution of local sales and use tax revenues among local agencies. Most retail transactions including dining, motor fuel purchases, and in-store purchases would not be affected. But in cases where the property is received by the purchaser in a different jurisdiction than where the sales agreement was negotiated, there would be a different distribution than under the current rules.

Under California’s current origin based sourcing rules, retail sales are generally sourced to the local jurisdiction of the retailer’s place of business and where the principal sales negotiations took place. Under destination based sourcing, sales are instead sourced to the jurisdiction where the purchaser receives the property, if the information is available to the retailer at the time of sale. If the location where the purchaser takes possession of the property is not known by the seller, alternative methods to source the tax include (in order):
• the location indicated by delivery instructions known to the seller, • the location indicated by the address of the purchaser available in the seller’s records, • the location of the purchaser’s payment instrument, or • the location from which the property is shipped.

Moving to destination based sourcing rules will not reduce the amount of local tax collected (in fact it will INCREASE the overall amount of tax retained by cities and counties), but it would result in different distributions among local jurisdictions. These differences would occur in cases where a retailer ships or delivers the property sold to locations outside the local jurisdiction of the retailer’s place of business. Specifically, a different distribution would occur under destination sourcing if:

1. The sold property is delivered to the purchaser in another taxing jurisdiction, or

2. The purchaser receives the property at a retailer’s business location other than where the principal negotiations took place.

12 The same issues that are of concern regarding the local sales tax do not apply to California’s Transactions and Use Taxes (“Add-on sales taxes”) as these transactions, when not over the counter, are generally allocated to the location of use or, as in the case of vehicles, product registration. There is no need to alter the sourcing rules for transactions and use taxes.

The Source of Origin Based Sourcing
Problems
Where other than over-the-counter sales are
concerned origin sourcing often causes a
concentration of large amounts of tax revenue in
one location, despite the fact that the economic
activity and service impacts are also occurring in
other locations.

The large amounts of revenue concentrated in a
few locations by California’s “warehouse rule”
origin sourcing causes a concentration of revenue
far in excess of the service costs associated with
the development.

In order to lure jobs and tax revenues to their
communities, some cities have entered into
rebate agreements with corporations. This has
grown to such a problem, that experts estimate
15% to 20% of total local taxes paid statewide are
being rebated back to corporations rather than
funding public services.

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Cities and counties that are comprised of a large number of retailers that routinely sell property that is shipped or delivered to purchasers outside their local jurisdiction may see a reduction in tax revenues compared to the current origin based system. But cities and counties that are comprised of businesses with a significant amount of over-the counter sales and residences that receive property from outside their local jurisdiction, may see an increase in local revenues.

Moving to Destination Sourcing: Issues

1. Destination Sourcing Would Add Some Complexity for Some Sellers.

For most transactions, including brick and mortar transactions and any transaction in which the seller delivers the product within the same jurisdiction, the seller’s tracking and reporting would be no different under destination rules. However, for deliveries outside the jurisdiction in which the seller resides, destination sourcing requires more information tracking. Under origin-based sourcing, sellers generally only have to know the sales tax rates in effect where their place of business is located. Destination-based sourcing requires sellers to properly apply sales tax rates for all the jurisdictions into which they deliver taxable items.

However, California’s transactions and use taxes (district taxes), now numbering over 121, require a seller to collect and remit the tax for a district if a delivery is made into that district AND the seller is “engaged in business” in that district. Large retailers with multiple locations are now, as a matter of practice, tracking collecting and remitting district tax rates. So the location of “receipt” is already being tracked and used for tax reporting. It seems no more difficult to apply this information to the sourcing of rest of the sales tax. In fact, it is arguably simpler and many large remote sellers are – for various reasons - already sourcing their transactions as “use tax” rather than sales tax.

A switch to destination sourcing would create a greater compliance burden for smaller sellers who do not currently use programs or databases to assist them in properly collect taxes. However, such programs are readily available.

2. Destination Sourcing Would Increase City and County Revenues A switch to destination sourcing would increase city general fund revenues by over $800 million to $1+ billion per year. Substantial amounts of local revenue that are currently being rebated back to corporations through sharing agreements would instead allocated to receipt locations not affected by those agreements. This amounts to an increase in sales tax revenues for every city of $25 to $35 per resident per year on average.

3. A Switch to Destination Sourcing would Alter Revenue Distributions Among Cities and Counties The greatest concern regarding the switch from origin-based to destination-based sourcing is the redistribution of local sales taxes from jurisdictions where taxable items are purchased to jurisdictions where the items are delivered.

A switch to destination sourcing would cause some shift in sales and use tax revenue distribution among cities and counties. Cities with less than average per resident taxable sales of products that are delivered to locations outside the jurisdiction will see an increase in revenues. Cities with a greater-than-average per resident amount of taxable sales of products delivered other locations will see some loss. In some cases, this loss will exceed the gain in revenues from the added amount of revenues to all cities (above).

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4. Destination Sourcing Rules Reduce the Incentive for Tax Rebate Agreements Add-on transactions and use taxes would not need to change. California’s Transactions and use tax is already a form of destination sourcing. The exception is the special provisions for motor vehicles where the district tax is sourced to the location where the property is registered. A change in the sourcing method of the Bradley Burns rate would not require an alteration of these rules. In effect, taxes would be applied to auto sales just as they are now.

5. Out of the Pool: Destination Sourcing Would Allocate Revenue to the True Locations of Economic Activity.

As a part of the shift to destination based sourcing, most revenues currently allocated to pools would instead be allocated to the specific jurisdiction where the property is received. Statewide and countywide pools would only be used when it is too difficult for a retailer to identify and report tax to specific jurisdictions. In this way destination sourcing allocates these tax revenues more closely to the situs of the economic activity (the sales transaction).

mjgc

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ADDENDUM: Notes from a Meeting with BOE Staff
In March, Dan Carrigg and Michael Coleman met with several members of the Board of Equalization’s sales tax staff to discuss practices and issues regarding the collection and distribution of sales tax especially use tax pooling.

BOE staff emphasize that they provide administration under state law and regulations adopted by the board, that they are “policy neutral.” Their role is to provide needed information to support policy decisions and implementation. If instructed to do so, the staff can and will administer the taxes differently, but in order to do so, BOE may need additional resources and that may necessitate additional administrative charges to tax revenue recipients. BOE staff noted that the pools were implemented many decades ago, prior to the existence of computers as we know them, when remote sales consisted primarily of catalogue sales. They note that the largest component of countywide pools is third party automobile sales (i.e. non-dealer sales). In those early days, over 50 years ago, the pooling system was established to reduce administrative costs and burden on the taxpayers (58 locations rather than hundreds for taxpayers to identify in their returns).

Computers today are vastly more sophisticated and capable. But while it would appear that the technology to identify specific locations of delivery in order to get distributions out of pools and out fully to the jurisdictions of distribution (true situs), there is no agreed-upon adopted GIS system. The technology appears close, with 9-digit zip codes and sophisticated geo-mapping. But the 9-digit zip code is administered by the US Postal Service with no concern for tax zones. In some cases even these sma ll 9-digit zip areas cross jurisdictions with different tax rates. In order to establish and maintain a central – agreed upon, master address to tax rate database, would require new systems and resources and an ongoing maintenance staff. The BOE is currently updating its data systems but the eventuality of a master central database for the determination of use tax apportionment by taxpayers as well as BOE has apparently not been explicitly anticipated.

mjgc

From: Rhoda Fry
To: City Clerk; City Council
Subject: December 5 2023 "Study Session"
Date: Tuesday, December 5, 2023 2:16:18 PM
Attachments: Potential Budget.pdf
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Clerk,

Please include the text of the attached for public comment for the December 5 2023 “study session” (not just a link to the document).

The staff report proposes that a sales-tax increase will generate an additional $5.4M in revenue – however this same tax was assumed to generate around $3 to $4M in FY 20/21.

Can you please show the data that produced the $5.4M number?

Even if we get to $5.4M in additional sales tax revenue – it will not make a big enough difference in the budget deficit.

The revised estimate for sales tax revenue for the next fiscal year $9M. So that would take us to $14.4M.

Will that be enough?
Note that our net sales tax revenue in FY 15/16 was $18.6M (and FY 22/23 it was $34.8M).

Will each election as to add another tax?

Please take a look at the data I compiled in the attachment.

Thanks,
Rhoda Fry
“Potential Budget-Balancing Strategies” mentioned in Cupertino Budget Budget Year Staff
Report
FY 23/24
page 188
FY 22/23
page 175
FY 21/22
page 177
FY 20/21
page 160
FY 19/20
page 141

0.25% sales
tax
$5.4M $5.4M $5.2M $4M $3-4M n/a
TOT –
transient
occupancy
Increase
to 15%
$1.9M*
Increase hotel tax from 12% to 14%:
$1.7M @ $10 base or $1.25M at $7.5M base
or $833k at $5M base
Increase to
14%: $2M
n/a
Biz License
was FY
20/21 TOP
CHOICE

$4.1M Not
mentioned
Not
mentioned
Not
mentioned $10M On
Workplan
Parcel Tax $3.7M $3.5M flat rate per parcel
$3.6M variable rate per sf
Not
mentioned
Not
mentioned
*15% TOT assumes $7.6 base (base was $9.7 FY 19/20); FY 20/21 Added stormwater fee $1.1M *Staff report favors non-ad valorem over square footage parcel tax – that would be regressive

Actual TOT (Transient Occupancy Tax – Hotel Tax) per Cupertino Opengov Actual FY 22/23 FY 21/22 FY 20/21 FY 19/20 FY 18/29 FY 17/18 FY 16/17 (open gov) $7.1M $4.4M $2.1M $9.7M $8.9M $6.8M $6M
Note: Residence Inn was built in 2017 and Hyatt House was built in 2018

Actual Sales Tax Income (after internet sales-tax-sharing rebates to two companies) Actual
Net
Sales
Tax
FY
23/24
FY
22/23
FY
21/22
FY
20/21
FY
19/20
FY
18/19
FY
17/18
FY
16/17
FY
15/16
~$9M $34.8M $42.4 $42.6 $35.7M $24.9M $26.2 $23.4M $18.6 Projected Net Sales Tax income 23/24 is $9M. Sales tax proposal of $5.4M only gets us to $14.4M.

FY 20/21 estimated that income at $3-4M. Is $5.4M estimate realistic or sustainable? Note - Sales tax income spiked during COVID mainly due to increase in statewide sales of Apple goods; Cupertino received $0.65 out of every $100 spent on goods from Apple online in California.

Cupertino Property Tax: Cupertino doesn’t get its fair share of property taxes. Of the 1% in property taxes that residents pay in Santa Clara County, the amount returned to cities varies greatly, with Cupertino getting only 6.51% of that 1%. Can staff work on fixing this? Or propose a per square foot on buildings tax rather than per parcel tax?
City % City % City % City %
Milpitas 16.26% Los Altos 11.66% Gilroy 9.70% Monte Sereno 6.35% Mountain View 16.07% Campbell 10.51% Palo Alto 9.42% Los Altos Hills

6.24%
San Jose 13.29% Morgan Hill 10.29% Los Gatos 9.42% Saratoga 5.77% Sunnyvale 13.28 % Santa Clara 10.02% Cupertino 6.51%

Cupertino Business License Tax is much lower than other cities on larger businesses (small businesses pay about the same as other cities). Other cities apply tax based on number of employees, revenue, square foot of buildings, etc… Cupertino pays much more per resident for Sheriff than Los Altos Hills and Saratoga. Why? Cupertino has a larger daytime population. Are businesses paying their fair share or are they being subsidized by residents.

Compiled by Rhoda Fry [email protected] 408-529-3560 CC 12-05-2023
Item No. 6
Adopt a maximum
rate schedule for Rate
Period Four for
Recology
Written
Communications
From: Tatiana S. Popova
To: City Council
Subject: 12/5 Council Meeting Agenda Item 6 (Recology)
Date: Monday, December 4, 2023 12:20:07 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Council Members,
I am writing in regards to 12/5/23 Meeting Agenda Item 6 (Recology).

I am kindly asking to not approve agenda item 6 and instead revisit the item to ensure there is no hike for SFH. There maybe opportunity for the negotiation for the lower rates with Recology and use of city funds to ensure the residents do not see hike if that happens.

Thank you very much in advance.

Sincerely,
Tatiana Kuzmenko
20233 Northcove sq, Cupertino
From: Rhoda Fry
To: City Clerk; City Council
Subject: City Council Agenda Item #6 Garbage
Date: Monday, December 4, 2023 10:38:43 AM
Attachments: GARBAGE.pdf
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Clerk,
Please post the attached inline (rather than as an attachment) for City Council Agenda Item #6 Garbage.

The summary for Rhoda Fry’s public comment is: Data shows that our garbage rates are not competitive; this needs to be fixed.

This document is an updated version of the previous one.

Thanks,
Rhoda Fry
From: Rhoda Fry
To: Cupertino City Council
Re: Agenda Item #6 Recology

I am writing you regarding two aspects of the garbage contract, the fees paid by Recology to Cupertino and the garbage rates.

Fees Charged by City to Recology - looks like a Tax
In 2024 (actually Feb 2024 – Jan 2025) the City will charge Recology a Fee of approximately $3.7M. If garbage rates go up, the fee goes up. In 2021, this fee was $2.9M per year. That’s a 27% increase in fees levied on Recology! An $800K hike in just three years! (2.9 x 1.27 = 3.7). In order for Recology to recoup that cost and remain profitable, it would need to charge more for our garbage. INCREASES IN CITY FEES, INCREASES RESIDENTS’ COST OF GARBAGE.

Fees Collected from Recology go to Two City Funds
• General Fund gets $2.1M. That looks like a tax. There’s no apparent connection (nexus) between the fee charged and the purpose for which it has been charged. • Solid Waste Fund Operations Fees Fund 520 gets $1.6M. But that money hasn’t been used much. In August 2023, that fund balance was $4.8M.1 So once again, there’s no apparent connection (nexus) between the fee charged and the purpose for which it has been charged.

Furthermore, is it okay to use this restricted fund to kick back money to Recology to “smooth” garbage rates?
And because the City is reducing its kickback to Recology, the net increase to the City coffers has been just over $1M in the past three years.

Why Do We Care? Taxation without Representation
The City appears to be taxing our garbage in order to raise funds for general use and for a fund that is not being fully used. The residents have not voted for these fees that sure look like taxes and the California Supreme Court thinks so too. The City cannot tax residents without a vote.

California Supreme Court Ruled on Franchise Fees in 2022 In 2022, the City of Oakland failed to demonstrate that solid waste franchise fees included in the City’s solid waste franchise agreements were exempt from voter approval.2 The firm BBK, recommends “Local agencies that receive franchise fees from a solid waste hauler may wish to consult with their legal counsel to discuss implications of the case.”

1. Please consider that fees charged to Recology are taxing residents on their garbage rates

2. Please ask City Attorney to provide an opinion as to whether:

A) Is it okay to use the Restricted Fund 520 to kickback money to Recology? B) The California Supreme Court ruling on fees applies to Cupertino.

1 City Treasurer’s Report 8/23:
https://cupertino.legistar.com/LegislationDetail.aspx?ID=6348231&GUID=1BB9CCFE-6363-4367-ADC0- 903E190950E0&Options=&Search=
2 Franchise Fees BBK: https://bbklaw.com/resources/california-supreme-court-rules-on-franchise-fees-for-solid- waste-contract; Franchise Fees CAL Cities: https://www.calcities.org/news/post/2022/08/24/california-supreme- court-ruling-in-franchise-fee-case-offers-more-questions-than-answers

Garbage Rates are High It looks like we are getting less for our money than other communities.

Our effective rate without the $2.01 per month subsidy is $44.20; this puts Cupertino higher than Campbell, Gilroy, Morgan Hill, and Mountain View. Separately, our Council had received a presentation on reducing our environmental impact through improved trash sorting that is used by our neighbors such as Mountain View and Sunnyvale.3 This service would increase our rates by $5 to $8 per month (see $5 added in table below titled Cupertino GREEN to compare).

If Cupertino offered a greener level of services like Mountain View Sunnyvale, Cupertino rates would be higher than most communities in Santa Clara County.

1. Please read the San Francisco Chronicle article, “S.F. waste giant Recology made millions more in profits than allowed, according to new report” 4

2. Please try to improve the Recology contract or consider a different vendor so that resident’s get their money’s worth.

City/Monthly Cost 19-24 Gal 32 Gal 35- 36 Gal 64- 65 Gal Company Campbell $34.51 $42.74 $77.56 West Valley
Cupertino $37.78 $40.18 $77.33 Recology
Cupertino Hills $62.10 $64.51 $125.91 Recology
Cupertino 2024 $39.67 $42.19
Cupertino 2024 $41.68 $44.20 Including Subsidy
Cupertino GREEN $46.68 $50.20 Minimum of $5 more if Cupertino goes greener Gilroy $40.42 $57.81 Recology
Los Altos $48.44 $96.87 Mission Trail
Los Altos Hills $42.52 $59.26 $118.58 Green Waste
Milpitas $36.46 $53.54 Milpitas Sanitation
Monte Sereno $42.48 $52.83 $96.64 West Valley
Morgan Hill $37.75 Recology
Morgan Hill Hills $40.99 Recology
Mountain View $28.90 $42.10 $84.20
Palo Alto $27.81 $50.07 $100.15
San Jose $51.40 $102.80
Santa Clara $49.12 $72.74
Saratoga $37.38 $46.40 $84.65 West Valley
Sunnyvale (43 gal) $38.46 $46.64 $52m.46 Bay Counties
Links to Garbage Rates in Santa Clara County Cities:
https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-campbell-garbage-rates/ https://www.cupertino.org/home/showpublisheddocument/30289/638150887302100000 https://www.cityofgilroy.org/DocumentCenter/View/13481/Gilroy-Franchise-Agreement---12-01-2022- https://missiontrail.com/losaltos/los-altos-service-rate-for-cart-bin-dumpster/ https://www.losaltoshills.ca.gov/479/GARBAGE-RECYCLING-COMPOST https://www.milpitassanitation.com/residential/servicemenu/ (sizes are different) https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-monte-sereno-garbage-rates/ https://www.morganhill.ca.gov/DocumentCenter/View/43478/Recology-South-Valley-Agreement?bidId= https://www.mountainview.gov/our-city/departments/finance-and-administrative-services/billing/utility-billing/trash- recycling-rates?locale=en
https://www.cityofpaloalto.org/Departments/Public-Works/Zero-Waste/About-Us/Refuse-Rates https://www.sanjoseca.gov/your-government/departments-offices/environmental-services/recycling- garbage/residents/garbage-recycling-rates-billing
https://www.santaclaraca.gov/our-city/departments-g-z/public-works/environmental-programs/residential-garbage- recycling/solid-waste-rates-14235
https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-saratoga-garbage-rates/ https://www.sunnyvale.ca.gov/homes-streets-and-property/utility-billing/utility-rates (2-month billing)

3 https://www.sunnyvale.ca.gov/homes-streets-and-property/recycling-and-garbage/smart-station-recycling-center 4 https://www.sfchronicle.com/sf/article/S-F-waste-giant-Recology-made-millions-more-in-17177504.php From: Kitty Moore
To: Pamela Wu; City Clerk; Kirsten Squarcia
Cc: Matt Morley
Subject: December 5 Item 6 Staff Questions and Written Communications Date: Monday, December 4, 2023 7:45:26 AM
Hi,

Thank you for the report and recommendations for the Recology Franchise Agreement.

The following questions/comments are for Staff and for Written Communications:

Question 1:

What is the new annual expected Franchise Fee amount? Is this still going to be calculated at 12% (Gross Receipts – Solid Waste Fund Operations Fee)?

Question 2:

Where has the city specified the use of the Franchise Fee showing some nexus between the fee and its use? Is it necessary from Prop 26 to provide a connection between the Franchise Fee being possibly earmarked for the use of the city streets for waste hauling trucks and bins? If we say this Franchise Fee is for street repair from the wear and tear of hauling trucks, must we have that in writing and do we then have to place the funds in a separate account for that purpose or may it be mixed with the General Fund?

Question 3:

Our city has a significant number of recyclables and food waste mixed in with our trash which does not get sorted and goes directly to the landfill.

San Jose has a higher cost, but their waste is sorted and diverted without the customer having to separate food waste out.

Sunnyvale requires food and recyclables to be sorted out, but the trash is further sorted to increase the diversion.

To have our trash sorted and diverted, Cupertino residential rate increases would be estimated at $5-8/month.

Please add the information about what the customers in each city are provided with their solid waste services and a note about the cost to sort if Cupertino were to add that so that we can make a fairer comparison.

For example: Does the customer at City X pre-sort food waste and recyclables? Is there post-pickup waste diversion or is misplaced waste sent to the landfill as is done in Cupertino?

Question 4:

The Resource Recovery Fund (Solid Waste Fund Operations Fee) is approximately $5.4 M as of October 31, 2023 and receives revenue ranging from a low of $123,429 (the contracted amount) to over $200k in a month, what accounts for the receipts over the contract amount? The Franchise Fee goes to the General Fund, so it is not accounting for it.

Question 5:

Adopted Budget page 485 for the (Solid Waste Fund Operations Fee) Resource Recovery Budget Unit 520-81-801 shows a Contract Services amount of $1,388,927 and there are 3.6 full time Staff assigned to this environmental program. What contracts are in the Contract Services? This relates to the Recology contract item 7.2 page 59.

Thank you,

Kitty Moore
Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389

From: Peggy Griffin
To: City Council
Cc: City Clerk
Subject: 2023-12-05 City Council Mtg-Agenda ITEM6-Recology rate increases are indirect taxes Date: Sunday, December 3, 2023 8:14:05 PM
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Dear City Council,

I am requesting that you PULL Agenda Item 6 – Recology rate increases. This truly needs to be discussed in public. Rate increases are not Consent Items!

Yes, there is an agreement and a calculation specified in it but there are variables that are not fixed in this agreement that the city specifies such as the
Franchise Fee
Solid Waste Fund Operations Fee
Residential vs Commercial and multi-family homes

The actual costs (math) should show why the single family homeowner’s costs are increasing over 5% (12%) yet the others are not. This needs to be discussed in public, not just a statement in a report. Please present the data.

It appears that the residents and businesses of Cupertino are being taxed without representation.

The Recology Franchise Fee comes out of their profits. This fee is transferred to the General Fund.

It feels like a kick back. As the Franchise Fee goes up, their profits go up so that both Recology and the City get their money, leaving the taxpayers paying the bill. Please explain.

Thank you and sincerely,
Peggy Griffin

From: Peggy Griffin
To: Ursula Syrova (she/her)
Cc: City Council; City Clerk; Matt Morley
Subject: 2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:

Date: Sunday, December 3, 2023 7:49:35 PM
Attachments: A - Report of City-wide Receipts Disbursements and Cash Balances October 2023.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

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Dear Manager Syrova,

I have several questions regarding this Recology rate increase and I’d appreciate it if you could answer these questions before the upcoming City Council meeting on Dec. 5, 2023.

Q1: How much percentage profit is Recology guaranteed to receive in this agreement each year? Is it really approximately 27.5%?
If so, why so high?

In Attachment C – HFH Report – Review of RP 4 Application.pdf, Section I Profit, Page 7 of 12

Q2: Is there any incentive in the agreement for Recology to reduce their costs from year-to- year? If so, what are they?

Q3: Can this agreement be terminated and re-negotiated? This is an unreasonable “guaranteed profit” not to mention during a time of financial stress on residents and the city. Going out to bid would be a reasonable approach to reduce costs. It seems that the profit margin given Recology is not comparable to other cities that have agreements with them (Gilroy, Morgan Hill to name a few). I have never seen a contract where you guarantee the recipient a profit that large! This is in addition to all the pass-through costs that they get re- imbursed for as specified in the contract. What a sweet deal!

The Resource Recovery Enterprise Fund 520-330 started out funded with $500k transferred from the General Fund in (Dec. 15, 2020 resolution) plus an increased appropriations of $285,864 for a total of $785,864. That total was Dec. 2020 or early 2021. Now that Resource Recovery enterprise Fund 520-330 sits at a balance of approximately $5,386,568 as of Oct. 31, 2023. $5 MILLION dollars! I’ve attached the Treasurer’s Report for Oct. 2023 for your reference.

Q4: Where did all this money come from?
Q5: Did it come from our Recology rate increases since Dec. 2020? If not, where did it come from?

Sincerely,
Peggy Griffin

October 2023 Report of City‐wide Receipts, Disbursements, and Cash Balances Cash and Investments
Beginning Balance Ending Balance
Fund Type Fund Number/Name as of September 30, 2023 Receipts Disbursements Journal Adjustments as of October 31, 2023 General Fund 100 General Fund 132,497,616 5,825,348 (4,220,431) 51,740 134,154,273 General Fund 130 Investment Fund (4,723) ‐ ‐ 194,719 189,996 Special Revenue Funds 210 Storm Drain Improvement 2,010,278 ‐ (443,734) ‐ 1,566,544 Special Revenue Funds 215 Storm Drain AB1600 1,921,375 5,782 ‐ ‐ 1,927,157 Special Revenue Funds 230 Env Mgmt Cln Crk Strm Drain 640,582 4,000 (62,870) ‐ 581,712 Special Revenue Funds 260 CDBG 658,011 1,324 (1,226) (367,951) 290,158 Special Revenue Funds 261 HCD Loan Rehab 222,300 ‐ ‐ ‐ 222,300 Special Revenue Funds 265 BMR Housing 5,141,955 ‐ (37,960) ‐ 5,103,995 Special Revenue Funds 270 Transportation Fund 12,576,645 423,538 (108,528) ‐ 12,891,654 Special Revenue Funds 271 Traffic Impact 779,541 ‐ ‐ ‐ 779,541 Special Revenue Funds 280 Park Dedication 18,925,191 15,000 ‐ ‐ 18,940,191 Special Revenue Funds 281 Tree Fund 66,682 3,300 ‐ ‐ 69,982 Debt Service Funds 365 Public Facilities Corp 2,684,450 ‐ ‐ ‐ 2,684,450 Capital Project Funds 420 Capital Improvement Fund 26,789,063 ‐ (58,248) 827,951 27,558,766 Capital Project Funds 427 Stevens Creek Corridor Park 154,692 ‐ ‐ ‐ 154,692 Capital Project Funds 429 Capital Reserve* 11,034,444 ‐ ‐ ‐ 11,034,444 Enterprise Funds 520 Resource Recovery 5,331,751 134,724 (79,907) ‐ 5,386,568 Enterprise Funds 560 Blackberry Farm 891,810 1,829 (45,022) 54,007 902,624 Enterprise Funds 570 Sports Center 1,527,828 ‐ (165,103) 214,172 1,576,896 Enterprise Funds 580 Recreation Program 3,416,063 8,120 (55,293) 72,117 3,441,007 Internal Service Funds 610 Innovation & Technology 4,159,336 5,666 (184,800) ‐ 3,980,202 Internal Service Funds 620 Workersʹ Compensation 3,698,977 ‐ (5,162) ‐ 3,693,815 Internal Service Funds 630 Vehicle/Equip Replacement 1,575,254 ‐ (179,910) ‐ 1,395,344 Internal Service Funds 641 Compensated Absence/LTD 886,384 ‐ 286 ‐ 886,671 Internal Service Funds 642 Retiree Medical (1,703,970) ‐ (110,200) ‐ (1,814,171) Total 235,881,535$ 6,428,630$ (5,758,109)$ 1,046,754$ 237,598,810$ * For reporting purposes, this fund rolls up/combines with Fund 420 Printed November 09, 2023
For more information on funds, please see cupertino.org/fund‐structure From: Peggy Griffin
To: City Council; Pamela Wu; Christopher Jensen
Cc: City Clerk
Subject: 2023-12-05 City Council Mtg-Agenda ITEM6-Recology RATE INCREASE-misleading agenda description! Date: Sunday, December 3, 2023 12:30:55 PM
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Dear Mayor Wei, City Manager Wu and City Attorney Jensen,

The description for Agenda Item 6, although “legally correct” is misleading to the public. It reads like you are setting a max rate that can be charged but in reality, you are setting the RATE THAT WILL BE CHARGED! This is basically a rate increase to homeowners yet it doesn’t say it. And buried in the staff report is another rate increase coming within this next year!

It would be nice if the agenda descriptions gave residents a heads up when a rate increase to basic services are being discussed so they are not blindsided. Trash collection is not a service residents can “opt-out” of nor do we want them to do so. Please make agenda descriptions “reader friendly”.

Sincerely,
Peggy Griffin
From: Santosh Rao
To: Pamela Wu; Matt Morley; City Council
Subject: 12/5 council meeting: Recology agenda item.

Date: Sunday, December 3, 2023 12:41:38 AM
Attachments: Staff Report.pdf
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Dear City Manager,, City Council,
Could you kindly clarify the % stated in the staff report for 12/5 agenda item related to Recology.

The Recology staff report cites rate hikes of 12% smoothed down to 5%. It is not clear what the % is. Is it 5% of the total Recology bill, 5% of garbage cart, 5% each for garbage and recycle.

A Recology bill is not typically the amount listed in the table. It is much higher. Please clarify if the recycle cart will also see a 5% hike. What will be the % hike on a sample total Recology bill that Cupertino residents currently see.

Also given the processing is not included what is the reason for the steep hike of 12%. (Albeit proposed to be smoothed down to 5%).

What is the hike for processing estimated to be and when will that be coming.

Also, is the consultant report included or will be in attachments. https://cupertino.legistar.com/View.ashx?M=F&ID=12488784&GUID=434CB313-A747- 4721-B1E2-6356AD14F56F
In addition it seems illogical to burden single family home owners with a 12% hike while commercial and Multifamily gets 0%. Can you please kindly consider negotiating passing on the hike to commercial and Multifamily to subsidize the costs for single family homes.

Finally, council members, could you kindly pull this item off consent calendar as cost increases to residents need you to explore options to reduce further by negotiating with Recology or seek a different bid but not approve this rate hike.

Thank you in advance for looking out for Cupertino residents monthly Recology costs and negotiating on behalf of residents.

Thanks,
Santosh Rao

CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023

Subject
Adopt a maximum rate schedule for Rate Period Four for Recology to provide recycling, organics, and solid waste collection, recycling and organics processing services, and transport for disposal as calculated using the allowed and approved methodology in the Franchise Agreement.

Recommended Action
Adopt Resolution No. 23-XXX (Attachment A) to:
1) Adopt a maximum rate schedule for Rate Period Four for Recology to provide recycling, organics, and solid waste collection, recycling and organics processing services, and transport for disposal pursuant to the franchise agreement (Attachment B; (FA Exhibit E2)), and
2) Authorize the use of $547,800 of restricted-use enterprise funds to smooth and mitigate the Rate Period Four adjustment.

Reasons for Recommendation
On December 15, 2020, the City of Cupertino Council approved a new 10-year Franchise Agreement (Attachment B)1 with Recology South Bay d/b/a Recology Cupertino (“Recology”) to provide recycling, organics, and solid waste collection, recycling and organics processing services, and transport for disposal. The Franchise Agreement as adopted included rates for the first three years along with detailed methodologies to calculate rates for each year through the remainder of the agreement term.

The methodology to determine the maximum rates for the upcoming Rate Period Four (RP 4), which begins February 1, 2024, is a cost-based adjustment detailed in Exhibit E.2 to the Franchise Agreement. City and Recology staff calculated the cost-based adjustment as specified, and the resulting rates are hereby presented for approval by the City Council (Exhibit A to the Resolution). Under Exhibit E to the Franchise Agreement,

1 For ease of use and reduced file size, the attached copy of the franchise agreement has section bookmarks and Recology’s original pre-negotiation proposal is not included. The full executed version can be accessed via Cupertino.org/records and a search for agreement 21 -232 or via this link.

“[t]he City Council shall make a good faith effort to approve Rates by January 1 of each year, and such Rates shall be effective on each subsequent February 1.”

The RP 4 adjustment does not include changes to how materials are handled after collection. However, Staff is currently working on an RFP to solicit new options for disposal of garbage, and on May 2, 2023, Council approved incorporating options to process garbage into that RFP. Currently, materials placed in the gray bins and carts (garbage) go directly to landfill. Processing the garbage would recover organic and other recyclable materials that are put into the garbage instead of being sorted properly, reducing the tons sent to landfill by a third or even a half. Processing garbage is more expensive than disposing it directly to landfill, but routing garbage for processing is a recommended action in the City’s Climate Action Plan 2.0 under item W1.2. Any changes in rates that would result from sending garbage to be processed would be addressed during a future rate period adjustment.

Regulation of Maximum Rates
The City does not set the rates for Recology’s provision of solid waste services, but rather approves the maximum rates Recology may charge its customers.

Review of the Rate Period Four Application
On August 1, in accordance with Section 8.2.C of the Franchise Agreement, Recology submitted its RP 4 application. To assess the appropriateness of Recology’s proposed rates, the City engaged a consultant, HF&H, to perform a detailed review of the Recology application, including data about Recology’s costs to provide the proposed services as well as their revenue requirements to cover costs and maintain profitability.

The review conducted by HF&H included determining completeness, compliance with the adjustment methodology, mathematical accuracy, reasonableness, and logical consistency of the assumptions supporting the projected revenues and expenses. Details of the analysis are included in HF&H’s report (Attachment C).

Rate Adjustment and Rate Smoothing
Per Recology’s RP 4 application and subsequent review, the overall increase in revenue needed by Recology in the upcoming Rate Period is 5.02%. Based on the cost to provide services, the single-family home residential rates would increase by 12.16% while commercial, multi-family, and roll-off box rates remain unchanged because projected revenues from those sectors are currently adequate to cover the costs to provide service.

The increase for single-family home residential rates can be smoothed downward to 5% by using $547,800 from the Resource Recovery Enterprise Fund. This reserve fund is earmarked for uses that benefit solid waste ratepayers, including smoothing of rate impacts. The City intends to use these funds through the remainder of the 10-year agreement to smooth rates for customers and avoid significant rate jumps in any one year. The recommended rate adjustment for each category of customer after using the Resource Recovery Enterprise Fund is shown in Table 1 below.

Table 1: Application of Rate Adjustments
Monthly Rate
Service Type Current Rate Period Four
(eff. 2/1/2024) % change $ per month
change
Residential:
32-gallon garbage cart
(bundled with recycling and
organics carts)
$40.18 $42.19 5% $2.01
Commercial/MFD:
1-3yd/1x/week, MSW $317.04 $317.04 0% $0

1.5yd/1x/week, Recycling $95.12 $95.12 0% $0

1.5yd/1x/week, Organics $198.14 $198.14 0% $0

Rate Comparisons with Neighboring Cities
Even with the proposed rate increases, Cupertino rates will be low in comparison with those of neighboring cities. The following tables 2 and 3 show Cupertino’s rates in comparison to nearby cities, both currently and with the proposed maximum rate for Rate Period Four.

Table 2: Residential Monthly Rate Comparisons
2023 single-family residential garbage rates per month sorted by 32 gallon cart City
20 or 24 gallon
cart
32 or 35 gallon
cart
Extra per
month
Milpitas $36.46 $39.63
Cupertino $37.78 $40.18 Current
Mountain View $28.90 $42.10
Cupertino $39.67 $42.19 5% increase $2.01
Campbell $34.51 $42.74
Sunnyvale $38.46 $44.64
Los Gatos $36.73 $45.74
Saratoga $37.38 $46.40
Los Altos $44.98 $48.45
Santa Clara $41.41 $49.12
Palo Alto $27.81 $50.07
San Jose n/a $51.40
Note: Rates shown are for July 1, 2023. The rates do not reflect subsequent adjustments including any adjustments for January 1, 2024.

Table 3: Commercial Rate Comparisons
City 3 CY bin 1x/week
San Jose $266.53
Milpitas $298.68
Cupertino $317.04
Mountain View $385.45
Campbell $395.23
Santa Clara $431.81
Los Gatos $488.91
Sunnyvale $498.51
Palo Alto $504.40
Saratoga $566.53
Los Altos $570.21
Note: Rates shown are for July 1, 2023. The rates do not reflect subsequent adjustments including any adjustments for January 1, 2024.

Sustainability Impact
Effective waste disposal programs that are convenient, well utilized and properly funded are essential to diverting recyclable and compostable materials from the landfill in accordance with AB939, the California Integrated Waste Management Act that requires at least 50% diversion from landfill after 1/1/2020, the City of Cupertino’s Zero Waste Policy adopted December 19, 2017, and compliance with SB 1383 Short-Lived Climate Pollutants (SLCP): Organic Waste Methane Emissions Reductions. The City and Recology partner on many of the diversion and waste reduction activities described in the community solid waste measures W-1, W-2, and W-3 in Cupertino’s Climate Action Plan 2.0 section “Getting to Zero Waste.”

Fiscal Impact
The City expects to receive about $3.7 million in RP 4 from Recology . These funds are received in the form of Franchise Fees and Solid Waste Fund Operations Fees . As noted earlier, staff recommends using $547,800 from the Resource Recovery Fund to offset part of the calculated rate increase in Rate Period 4 for the benefit of ratepayers. These costs are already included in the FY2023-24 Final Budget for fund 520, no budget adjustment is necessary. The amount of revenue raised by the fees, and their uses, have been independently evaluated by HF&H.

On December 15, 2020, Council establish ed a minimum reserve in Fund 520-330 of $500,000 to ensure that drawdown of this fund does not exceed a prudent reserve of 2% of the City’s solid waste program operating costs.

Table 4 shows the fiscal impact to the City since the agreement began. Because the current Rate Period (RP 3) is not yet complete and RP 4 is projected, some numbers are not known yet and are shown in italics.

Table 4
Fiscal Summary
Feb 2021 –
Jan 2022
(RP 1)
Feb 2022 –
Jan 2023
(RP 2)
Feb 2023 –
Jan 2024
(RP 3)
Feb 2024 –
Jan 2025
(RP 4)
Franchise Fees
(for use by Gen. Fund) $1,513,007 $1,771,937 $2,047,763 (projected)
$2,140,000
(projected)
Solid Waste Fund
Operations Fees
(Fund 520 – restricted use)
$1,396,128 $1,438,008 $1,481,148 $1,635,967
Total Received $2,909,135 $3,209,945 $3,528,911 $3,775,967 Use of Fund 520 for rate
smoothing ($ 686,072) ($ 957,082) ($ 840,405) ($547,800) Net to City $2,223,063 $2,252,863 $2,688,506 $3,228,167

California Environmental Quality Act
Not applicable.

_____________________________________

Prepared by: Ursula Syrova, Environmental Programs and Sustainability Manager Reviewed by: Chad Mosley, Director of Public Works
Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – Draft Resolution
B – Recology Franchise Agreement
C – HF&H Report – Review of Recology RP 4 Application

From: Tracy Kosolcharoen
To: City Council
Cc: City Clerk
Subject: Written comment for Dec 5th City Council Meeting Date: Tuesday, December 5, 2023 3:06:05 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Council,
Please pull items 6 & 8 from the consent calendar.
#6 - If you are approving higher garbage rates on homeowners, this should be discussed. - How exactly is the 10 year rate smoothing going to happen? I understand there's a 5% increase for the first year but what about subsequent years? Are we eventually going to end up at the top of the pack when it comes to rates? Please provide clarity for the 10 year rate hike schedule.
- Is it fair to compare Cupertino to other cities that have higher levels of garbage sorting? Are we paying more for the same lower level of service while other cities are receiving a higher level of service?
- Why is only $547k of the franchise fees used to offset higher rates for ratepayers? Can you please provide a clearer breakdown of what happens with the rest of $3.7M, and how the split was determined?
#8 - It's great that we have a grant from SVCE. However, grant funding is finite and the products we receive for free have the risk of negatively burdening this city once the funding runs out. This is especially important to consider if Cupertino is in dire financial straights (and can't even fund, say, July 4th fireworks).
- Who will have liability for the BEAM products if something wrong happens to a car that uses them?
- Who bears the cost of "additional support and maintenance"? How much does it cost and how frequently is this cost incurred? I get that the purchase is free from a grant, but similar to cars, the maintenance and servicing is usually extra!
What I don't want is to end up after a few years with yet another cost line item that this city must bear, while all our community services have been cut.

Thank you,
Tracy
From: Peggy Griffin
To: City Council
Cc: Ursula Syrova (she/her); City Clerk
Subject: FW: 2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:

Date: Tuesday, December 5, 2023 2:33:19 PM
Attachments: image001.png
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CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

City Clerk: Please include this email as part of written communications for 12-5-2023 CC Agenda Item #6.

Dear City Council,

FYI…I’m not sure if you were blind copied so I’m sending this information provided by Ursula Syrova.

Sincerely,
Peggy Griffin

From: Peggy Griffin <[email protected]>
Sent: Tuesday, December 5, 2023 2:05 PM
To: 'Ursula Syrova (she/her)' <[email protected]>
Subject: RE: 2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:

Ursula,

Thank you for taking the time to answer my questions. I really appreciate it.

I now remember reading some place that the fund was going for 20 years. I still think even 17% profit is very high. I believe Gilroy or Morgan Hill’s agreement is at 9% profit. That said, I now understand that if they exceed their capped 5% on line items that has the potential of eating into their profits so it’s an incentive to keep it to a max of 5%.

Sincerely,
Peggy Griffin

From: Ursula Syrova (she/her) <[email protected]
>
Sent: Tuesday, December 5, 2023 10:08 AM
To: Peggy Griffin <[email protected]>
Subject: RE: 2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:

Hi Peggy,

Thank you for your close reading of the Council packet and attention to detail and for your questions. I have provided responses below in blue and I hope that helps clarify some points and answer others, but let me know if you have additional questions.

Best,

Ursula

Ursula Syrova (she/her)
Environmental Programs and Sustainability Manager
Public Works
[email protected]
(408) 777-7603

From: Peggy Griffin <[email protected]>
Sent: Sunday, December 3, 2023 7:49 PM
To: Ursula Syrova (she/her) <[email protected]>
Cc: City Council <[email protected]>; City Clerk <[email protected]>; Matt Morley <[email protected]>
Subject: 2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:

CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

PLEASE INCLUDE THE FOLLOWING EMAIL AND ATTACHMENTS AS PART OF WRITTEN COMMUNICATIONS FOR THE ABOVE CITY COUNCIL MEETING AGENDA ITEM.

Dear Manager Syrova,

I have several questions regarding this Recology rate increase and I’d appreciate it if you could answer these questions before the upcoming City Council meeting on Dec. 5, 2023.

Q1: How much percentage profit is Recology guaranteed to receive in this agreement each year? Is it really approximately 27.5%?
If so, why so high?

In Attachment C – HFH Report – Review of RP 4 Application.pdf, Section I Profit, Page 7 of 12

The Franchise Fee remitted to the City comes out of Recology’s profit, and that is set at 12%, so profit beyond that for Recology would be around 17%, which is within the typical range for the industry.

We’re not guaranteeing a profit - the company needs to operate responsibly, and we’re not even guaranteeing we'll cover their costs because there are caps built into the methodologies – a 5% cap on allowable cost of operations during cost-based adjustment years and a 5% cap on total calculated costs during index-adjusted years.

Q2: Is there any incentive in the agreement for Recology to reduce their costs from year-to- year? If so, what are they?
The caps built into the methodologies provide a built-in incentive to keep costs below those.

Q4: Where did all this money come from?
Q5: Did it come from our Recology rate increases since Dec. 2020? If not, where did it come from?
The Resource Recovery Fund has been accruing for over 20 years, separate from the General Fund, and it was prudent to have a reserve in case of a sudden need to cover the cost of all operations for some limited amount of time. Rather than a beginning balance, the $500,000 is a suggested prudent reserve amount that was approved by Council in 2020. During the 2020 approval of the current franchise agreement, Council approved use of the Resource Recovery fund to smooth rate increases for ratepayers with a goal of drawing the fund down to that prudent reserve by the end of the current agreement term.

Sincerely,
Peggy Griffin

CC 12-05-2023
Item No. 8
Accept Silicon Valley
Clean Energy
Community Resilience
Grant
Written
Communications
From: Kitty Moore
To: Pamela Wu; City Clerk; Kirsten Squarcia
Cc: Matt Morley
Subject: December 5 Item 8 Staff and Written Communications Date: Monday, December 4, 2023 8:09:14 AM
Hi,

Thank you for the report on Item 8, the following are questions/comments for Staff and Written Communications:

Question 1:

Attachment B states these units will be rotated every two months. Has Staff been trained on moving these units?

Question 2:

The report mentions these are designed for winds up to 160 mph, what features do they have with regards to their seismic design?

Question 3:

What is the cost differential from installing a permanent solar charger station? An internet search of Solar Carport yields many options and styles.

Question 4:

What is the ongoing maintenance, expected useful life, and how is the assembly, especially the battery be disposed of?

Question 5:

What Level Charger will this have?

Question 6:

It appears that the EV ARC 2020 is specified as the charging system but the EV charger is selected by the City? Can that be competitively bid? For instance, can we specify we want a Level 3 charger and choose the lowest bid?

Thank you,

Kitty Moore

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389

From: Peggy Griffin
To: Chad Mosley
Cc: City Clerk; City Council
Subject: 2023-12-05 City Council Mtg-Agenda ITEM8-Beam EV Arc Grant Date: Sunday, December 3, 2023 8:42:51 PM
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PLEASE INCLUDE THE FOLLOWING EMAIL AND ATTACHMENTS AS PART OF WRITTEN COMMUNICATIONS FOR THE ABOVE CITY COUNCIL MEETING AGENDA ITEM.

REQUEST: Director Mosley, please forward to Assistant Director Tan.

Dear Assistant Director Tan,

I have a few questions regarding this EV grant:

Q1: Will it only take up 1 parking space or will the adjoining spaces be unavailable for parking? As you know, parking is at a premium so this is important to know in advance.

Q2: Funding…does the city have to buy it first then get re-imbursed or are they given the money first?

Q3: Will there be any additional costs NOT COVERED by this grant to implement this feature? If so, how much?

Q4: How much wind can this contraption endure? What is the max sustainable win before it topples over?

Sincerely,
Peggy Griffin

Thank you,
Tracy
CC 12-05-2023
Written
Communications
Item No. 10
Amendment to Chapter

19.76 and a Conditional
Use Permit and Parking
Exception
From: shirley wang
To: City Council
Subject: Tessellations’ application for Conditional Use Permit and the parking exception Date: Monday, December 4, 2023 9:52:55 AM
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Dear Cupertino City Council,
We moved to Cupertino in 2010 due to its reputation for close-knit community and its world-renowned public schools. In suit, my parents moved to Cupertino in 2012 attracted by the safety and close-proximity to conveniences such as parks, a robust community center offering exercise and art classes, excellent health care and of course to be close to their 3 children and 7 grandchildren.

For more than a decade, my 3 sons have greatly benefited from CUSD’s Christa McAuliffe Elementary School with their social emotional learning curriculum, caring teachers and parent participation model that leads to an invested community of learners and teachers.

However in 2019, My 3rd grader’s teacher let us know that our son was academically light years ahead of the class and that she was having a hard time finding activities that would challenge and engage my son. Although I loved our parent participation school, I knew it was time to look for a different learning environment. In my initial search, I found a couple of schools geared towards gifted education, but they were all outside of Cupertino, which would mean longer commutes with our 2-working parent family and also meant investing in a community outside of Cupertino. I honestly felt it was a shame that the Silicon Valley did not have an equivalent school to Nueva, which is located almost 25 miles north, in San Mateo.

Imagine my delight when Tessellations began their visionary school in 2020. A progressive education that was tailored to gifted children and not solely focused on academics, but on the whole child with consideration for social emotional learning and emphasis on community building! The icing on the cake was that it would be located in our hometown, Cupertino! We were so excited that our children would be able to stay in the city that we had invested in since 2010.

It is interesting that in its three short years of existence, Tessellations has built quite a reputation for providing education to this unique population. It seems that each week I have a different parent asking me about Tessellations and how it has helped my children. It would be a shame if this school no longer existed, as there is clearly a need in this community.

To help minimize morning and afternoon in this busy area, the school has asked anyone within walking or biking distance to consider avoiding driving their kids to school. Both my sons, along with other kids in the neighborhood, bike to and from school every day. Thankfully the city of Cupertino has added all the green lanes and specially marked off spaces for our kids to safely do this! For those that need to car commute, Tessellations has implemented an app-based car line management to speed up drop off/ pick up and minimize the need to park. Since school started in August, we have also received several emails of new systems in place, as the staff at Tessellations carefully and conscientiously strive to make every possible improvement to increase efficiency and decrease disruption to the surrounding neighbors. I have three children at three different schools and I must say that the effort Tessellations has put into achieving good neighborly behavior is above and beyond! I understand that Tessellations is applying for Conditional Use Permit and the parking exception. As residents and constituents of the city of Cupertino, my family and I strongly urge you to approve this request.

Sincerely.

Shirley and Willie Wang
21430 Millard Lane
Cupertino, CA 95014
Angela and John Liang
7670 Orange Blossom Dr.

Cupertino, CA 95014
From: Lynn Ooi
To: City Council
Subject: Cupertino resident in support of Tessellations Date: Sunday, December 3, 2023 11:12:56 PM
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To whom this may concern at the Cupertino City Council, Our family moved to Cupertino in 2019 for its stellar public school system.

We had an amazing experience in Christa McAuliffe School (CUSD) from K-3, where we got a quality education and met extraordinary people who have developed into lifelong friendships. In 3rd grade, we discovered that our child's intellectual needs as a highly/profoundly gifted child could not be met in a public school setting. This is by no fault of the school, but it is just very difficult for a public school to accommodate the top 1-2% of the bell curve. To these kids, it is a true need to feel challenged every day to avoid behavioral issues. Just like kids who need an IEP, these kids need differentiation and be with like-minded peers.

We have been with Tessellations for 4 years since its inception and we cannot be happier that my son has found the village that challenges him academically and understands the importance of social-emotional learning within this demographic to truly thrive. We were ecstatic when Tessellations decided to make Cupertino their home base. This provides an invaluable resource to this underserved population for Cupertino and the Bay Area. We are so lucky to have this school in our city.

The school has been very organized in making sure we are good neighbors. The campus has gone through thoughtful renovations to incorporate more greenery to mimic a park-like setting. The school uses a streamlined checkout system to ensure efficient and smooth pickup lines. We have been told to avoid parking too close to home driveways. The school has utilized the school blacktops to avoid street parking whenever possible. We have gone to great lengths to avoid any inconvenience to the neighbors in good faith.

We hope the city council will approve our beloved school's Conditional Use Permit and parking exception.

With regards
Lynn Ooi & Jack Wu
10655 Cordova Rd,
Cupertino CA 95014

From: danny pan
To: City Council
Subject: Support for Issuing a Conditional Use Permit to Tessellations School Date: Sunday, December 3, 2023 10:33:44 PM
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Dear Members of the Cupertino City Council,
I am writing to express my strong support for the issuance of a Conditional Use Permit to Tessellations School, a unique institution that caters to gifted children. As a resident and a parent of children attending Tessellations School, I believe that granting the school a permit will not only benefit the students but also contribute positively to our community.

Since my family and I moved to Cupertino this fall, we have witnessed the invaluable impact Tessellations School has had on the intellectual and social development of our children. The school's commitment to fostering the growth of gifted students is evident in its dedicated faculty, innovative curriculum, and the nurturing environment it provides.

In addition to benefiting our children, Tessellations School has the potential to enhance the overall well-being of our neighborhood. I have had conversations with many neighbors who previously had children and grandchildren attending the old school that was abandoned in this location. They, like me, miss having the joyful presence of children in our community. The prospect of Tessellations School reopening and filling this void is exciting, as it not only rejuvenates the abandoned space but also brings positive energy and life back into our neighborhood.

Granting Tessellations School a Conditional Use Permit aligns with the values of community engagement, educational excellence, and neighborhood vitality. The school's presence can foster a sense of togetherness and create a supportive environment for both students and their families.

I kindly urge the Cupertino City Council to consider the broader impact of supporting Tessellations School and to grant the Conditional Use Permit. Doing so will not only benefit the education and development of gifted children but also contribute to the overall enrichment of our community.

Thank you for your time and consideration of this matter. I look forward to witnessing the positive transformation that Tessellations School can bring to our neighborhood.

Sincerely,
Danny Pan
Resident of Cupertino
From: Shoshana Gleit
To: City Council
Subject: Conditional Use Permit
Date: Sunday, December 3, 2023 10:25:58 PM
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Dear Cupertino City Council,
I am a Cupertino resident who specifically chose to move to this neighborhood because of Tessellations School. I strongly support the school's Conditional Use Permit.

Tessellations enhances the appeal of Cupertino and serves a unique population. Our decision to move here was directly influenced by the school, and we have not encountered significant issues with parking or traffic.

I urge the City Council to approve Tessellations' Conditional Use Permit, aligning with our community's values.

Thank you for your consideration.

Sincerely,
Shoshana Gleit
From: Doug Carter
To: City Council
Cc: Haley Champion Carter
Subject: Strong Support for Tessellations" Conditional Use Permit Date: Sunday, December 3, 2023 9:47:56 PM
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Dear City of Cupertino
We are Haley and Doug Carter, Cupertino residents on Bubb Road. We are writing in support of Tessellations' application for a Conditional Use Permit.

In June, we left the Palo Alto school district and currently enroll two of our children at Tessellations School and two in the Cupertino Union School District. Prior to attending Tessellations, our two children's needs weren't met and it manifested daily in depression and anxiety. Now at Tessellations, their unique needs are being met and they are thriving, happy students and community members.

We ask that you incorporate the following considerations into the application process:

We strongly believe in the development power of local/community schooling, and thus chose a house within a 2 block walking distance of our children's schools.

The Tessellations drop-off/pick up process is incredibly efficient and well-managed by School administrators on a daily basis. Lincoln Elementary would benefit from observing the Tesselations plan, and its incredibly limited impact on the surrounding residential area.

Cupertino has been a breath of fresh air for us - hiking in Fremont Preserve, walks along Stevens Creek, biking to the farmer's market on Sunday, and exploring the local restaurants and stores. We are happy to be here.

As a Tessellation family, our children are also enrolled in Cupertino city programs and excited about continuing to connect with the community
Like us, Tessellation parents living outside Cupertino still spend time here and thus shop at local stores, resulting in a positive impact to the local economy.

The reputation of Tessellations will have a positive impact on local real estate. Having the Regnart school campus occupied and significant site improvements made will only make the neighborhood even more attractive.

We are happy to continue this dialogue and look forward to your response.

Sincerely,
Doug & Haley Carter

-------------------------------------------------------- Douglas Carter
[email protected]
--------------------------------------------------------- From: Chengjiao Yang
To: City Council
Subject: Trail from Varian Park to Stevens Creek Boulevard Date: Sunday, December 3, 2023 8:38:33 PM
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Dear City Councilmembers,
We are Cupertino residents who currently use a trail on private land to get from Varian Park to Stevens Creek Boulevard. We understand that the landowner is willing to donate this land to the City as long as the City will keep it open continuously as a trail.

This trail serves as a convenient route linking our neighborhood to Blackberry Farm and Monta Vista, providing valuable connectivity for our community. We strongly advocate for the City to accept this generous donation, ensuring that the trail remains open and accessible to the public.

We believe that bringing this trail into public hands would be a positive step forward, benefiting residents and enhancing recreational opportunities. We wholeheartedly encourage the City to accept the land donation and commit to keeping the trail open for the enjoyment and convenience of Cupertino residents.

Thank you for your consideration.

Sincerely,
Chengjiao Yang
From: Anurag Agarwal
To: City Council
Cc: Ritika Garg
Subject: Conditional Use Permit for Tessellations school Date: Sunday, December 3, 2023 2:09:03 PM
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Dear City Council Representative,
I am reaching out to voice our strong support for Tessellations, a unique K-12 private school that has profoundly impacted my children, aged 7 and 9, and our community in Cupertino.

Having experienced the educational landscape of the South Bay, I wanted to share why Tessellations is unique:

Holistic Child Development: The school's approach to addressing both strengths and challenges, such as dyslexia and ADHD, is unparalleled, fostering a nurturing environment for intellectual and emotional growth.

Community Enrichment and Reputation: Tessellations is attracting attention across South Bay for its innovative methods and enhancing our community's educational prestige. We know of many of our friends who are very interested in the school and have seen many parents move to Cupertino to be able to provide this education to their kids.

Great neighbor: Tessellations has streamlined its traffic flow, ensuring minimal impact on local traffic through:

Efficient drop-off and pick-up procedures.

Use of the DashPass app for expedited pick-ups.

Additional parking arrangements and proactive communication with families.

We drop-off and pick-up our kids daily from the school and have experienced absolutely no issues or crowding.The school has done a great job in rejuvenating the campus through a lot of volunteer work and that benefits the surrounding community as well with continued access to the grounds and common areas.

In light of these, I urge the City Council to grant Tessellations the Conditional Use Permit and Parking exception. Tessellations is a great addition to Cupertino and adds to its reputation for providing the best education for kids.

Thank you for your time and consideration in this important matter.

Sincerely,
Anurag Agarwal and Ritika Garg
22415 Palm Ave, Cupertino, 95014
From: Prakash Passanha
To: City Council
Cc: Smitha Passanha
Subject: Conditional Use Permit and Parking exception for Tessellations School Date: Sunday, December 3, 2023 12:10:52 PM
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Dear Cupertino City Council,
We have been residents of Cupertino for the last 7 years. Our son, Vinit, went to Lincoln Elementary School for his elementary education. He had a good experience there but struggled a lot due to mismatch between CUSD teaching philosophy and his unique way of learning.

We believe every child deserves a medium of instruction that helps them uncover and leverage their strengths.

Seeing Vinit struggle with the traditional way of teaching, we looked hard for a strong match and Tessellations was a god sent gift for him. He is blossoming as an individual and we believe this will help him become a great human being and an effective member of the society, primarily Cupertino where we reside.

We live right next to William Faria Elementary (on Bonny Dr), this is a lottery school where 99% of kids come from non-walkable parts of Cupertino. Faria is way bigger than Tessellations and the traffic and parking situation is lot more worse. Tessellations has made a lot of effort to minimize parking and traffic issues and it really seems to be working well at this point. Re Faria, we have never complained about the traffic/parking situation to the City and have instead adjusted our daily routines because we are steadfast in our belief that these kids deserve the education they seek.

We urge the city to be equally accommodating and request the residents to look at the greater good. Please grant Tessellations the Conditional Use Permit and Parking exception they seek.

Thank you
Prakash and Smitha Passanha
10221 Bonny Dr,
Cupertino CA
95014
From: Lakshmi Iyer
To: City Council
Subject: Conditional Use Permit and Parking Exception for Tessellations Date: Sunday, December 3, 2023 11:40:58 AM
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Dear City Council Representative,
We are writing to express my support for Tessellations, a K-12 private school attended by my sons, aged 11 and 9. Over the four years that we have resided in Cupertino, we have experienced both public and private schools in the South Bay, and we can say with confidence that none met our needs as well as Tessellations does.

What sets Tessellations apart is its commitment to embracing the whole child, recognizing and nurturing both their strengths and weaknesses. The staff at Tessellations demonstrates a profound understanding of advanced intellectual abilities, as well as asynchronous social and behavioral needs. The school has become a haven for exceptionally bright children facing challenges such as dyslexia, dysgraphia, ADHD, and anxiety, offering a unique and indispensable educational experience in the Bay Area. My children thrive at Tessellations, benefiting from advanced academic challenges alongside tailored support for social-emotional learning. As Cupertino residents, we proudly recognize Tessellations as a highly sought-after institution that not only enriches our community but also brings a stellar reputation to Cupertino as there are no other viable alternatives in the Bay Area.

We recognize that local residents have sought to understand the impact of traffic and parking in the neighborhood. We drive to and back from Tessellations for drop offs and pick-ups regularly. Despite the concentration of several schools in the area, Tessellations has efficiently streamlined car drop-off and pick-up lines for a smooth and quick process. Families use I-85 and Rainbow drive to approach the school and generally avoid Bubb Rd. Additionally, online check-ins with DashPass app reduces the wait time for pick-ups. Tessellations has demonstrated adaptability and responsibility by making additional parking arrangements, such as utilizing the blacktop for parking, and timely communication with families regarding newer parking regulations. Consequently, we rarely find the need to park on the street during pick- ups. Moreover, we are aware of several families who actively participate in carpooling, further mitigating the impact on local traffic and parking needs.

Given this firsthand testimony, we urge the City Council to grant Tessellations, a responsible and integral member of our community, the Conditional Use Permit and Parking exception.

We thank you for your time and consideration.

Yours Sincerely,
Lakshmi Iyer and Balaji Krishnapuram
21877 Corte Madera Ln,
Cupertino, CA 95014.
301-221-9373.

From: Gill Doyle
To: City Council
Subject: Comment 2 for Dec. 5 Public Hearing
Date: Saturday, December 2, 2023 10:34:24 PM
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Once the city council grants its conditional use permit to Tessellations, it loses any leverage it had to enforce its parking requirement. Already Tessellations is ignoring parts of that agreement. Tessellations was asked to provide 148 parking spaces on campus or at a remote lot with shuttle service. Tessellations has declared that it sees no need at present to provide shuttle service to its 82 parking spaces at New Life Church. With no shuttle service in place, those 82 parking spaces have in effect not been delivered. Tessellations has promised to provide an additional 20 spaces on campus. But it has also said that it will park at least 9 of its 14 school vans on campus. If 9 of those 20 spaces are occupied by school vans, then what has been delivered on campus is just 11 spaces, not 20. The City's parking requirement was supposed to force Tessellations to provide a number of parking spaces sufficient for its staff of 70+. However, even if Tessellations does provide those 11 new spaces at the school, there will still be only 54 spaces at the school for a staff of 70+ now and 85+ by the end of the year.

What is to prevent Tessellations from putting its staff cars back on our streets once it has the CUP that forced it, in the first place, to get those cars off the street? How would the City force compliance once it has given Tessellations what it wants — namely, the CUP? For two months (from August into October), Tessellations ignored neighbors' entreaties to get its cars off our streets. Tessellations continued to use the streets around the school as its own private parking lot until the City threatened to withhold its CUP. Only then did Tessellations withdraw its cars.

If the City is serious about having its permit holders comply with the conditions that it attaches to its CUPs, then it should provide for periodic reviews at which the CUP is renewed or denied — depending on whether the permit holder has complied with the conditions attached. In this way, the City would stand a better chance of keeping its permit-holders in line.

Another thing: Tessellations continues to say that the City has ordered it not to park its cars in front of the school on Yorkshire Drive. The men who drive its school vans park their own cars on Folkestone and leave them there all day long while they drive the schools' vans. One of these chauffeurs has told me that he was instructed not to park on Yorkshire or in the school's lot. This makes no sense. No one objects to Tessellations parking its cars in front of the school. It should do that or park its cars on campus. It should not allow its staff to park their cars in front of the neighbors' homes.
- Gill Doyle (7952 Folkestone Drive)
From: Xinghua Yu
To: City Council
Cc: Xinghua Yu
Subject: In Support of Approving Tessellations" Conditional Use Permit and Parking Exception Date: Saturday, December 2, 2023 9:06:47 PM
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Dear City Council,
Our family recently moved to Cupertino because of Tessellations. Many other families are being attracted to Cupertino for the same reason. Tessellations provides a one-of-a-kind learning experience that many gifted children like mine benefit tremendously—a resource we haven't found elsewhere.

Tessellations has been very conscious about adding value to the neighborhood and minimizing any possible inconvenience to the local residents. Starting from day 1, we received many communications from our school about being a good neighbor, leaving extra clearance around driveways when parking in the neighborhood, choosing biking/walking when possible (my son loves biking to and from school every day), using app-based car line management to speed up drop off/ pick up and minimize the need to park, utilizing school blacktop for parking for school events, etc. With all of these efforts, it's not surprising to see how parking and traffic have been running smoothly around the school. We're very proud to be part of such a caring community.

We are aware that there will be a city council meeting regarding Tessellations' Conditional Use Permit and Parking Exception. As a Cupertino resident, I wholeheartedly support the approval and believe it will further contribute to our city's growth and enrichment.

Thank you for considering my perspective.

Sincerely,
Xinghua Yu
1440 Rose Garden Ln,
Cupertino, CA 95014
650-223-5886
From: Gill Doyle
To: City Council
Subject: Comment for Dec. 5 Public Hearing
Date: Thursday, November 30, 2023 3:25:52 PM
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I feel that the City mishandled Tessellations' takeover of the old Regnart School site. The municipal code amendment that will presumably get approval at the Dec. 5 public hearing will pave the way for more of these private takeovers of public school sites in Cupertino. The City must try harder next time to do it right.

Tessellations opened in August without having acquired the conditional use permit that it needs to operate at the site. How did that happen?
There was no traffic study done. Neighbors on Rainbow complain that they can't get out of their driveways during rush hour, when Tessellations' parents arrive from all over the Bay Area via Highway 85 and then come up Rainbow to the school. While the public school kids walked or rode their bikes to Regnart or came by car from neighborhoods close by, 95% of the children at Tessellations arrive by freeway. The traffic patterns are very different now than they were when the public school was operating here. That should have called for a traffic study.

Tessellations' staff is much larger than Regnart's was. CUSD and Tessellations were well aware before school opened in August that there is insufficient parking at the school for Tessellations' 70 staff members. That staff will grow to 85 later this year. There are 47 parking spaces in the old lot in front of the school. Four of those are handicap spots.

Tessellations parks at least 9 of its 14 school vans at the school. Why wasn't the City on top of this parking problem? In response to the street parking that we experienced for two months on Folkestone and Yorkshire, the neighbors here organized to request that a residential permit parking zone be set up around the school.

On about October 8, someone in city government (planning division?) apparently told Tessellations that it would have to get its cars off our streets in order to qualify for the conditional use permit that it needs. At that point, Tessellations' staff cars disappeared, but the neighbors here were never informed. It took us a month to find out why those cars had vanished. When we finally learned about the City's talks with Tessellations regarding its CUP and parking requirement, the neighbors decided that a revote was in order. We voted again and decided to suspend our permit parking drive. It would have been good if the City had coordinated with the neighbors here and told us what was happening.

In short, the City handled all of this poorly. Demographics suggest that other public schools in Cupertino could close before families with children return to Cupertino. The City should be better prepared next time. Before it allows another Tessellations to move into some unsuspecting neighborhood, the City should undertake studies — traffic and parking studies — that will help us all understand what the repercussions might be on the immediate and wider community. These things should be understood before the private school is allowed to open. It might be a good idea also to get the neighbors involved next time. - Gill Doyle (7952 Folkestone Drive)
From: Chirag Shah
To: City Council; Jagruti Shah
Subject: Subject: Urgent Request for Approval of Conditional Use Permit and Parking Exception for Tessellation School Date: Monday, December 4, 2023 1:33:39 PM
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Dear Esteemed Cupertino City Council Members,
I am writing to express my sincere gratitude for the invaluable contributions the City Council has made to Cupertino's education landscape. I also wish to bring your attention to an important matter regarding Tessellation School, which plays a vital role in our community.

Cupertino takes pride in its distinguished education system, an outcome of the visionary leadership of community figures and committed parents. I urge you to consider Tessellation School not merely as a private institution but as an extension of our excellent education system, catering to a unique and underserved population (highly gifted) for the extended Bay Area community. While Tessellation is a private school, it serves as a necessity rather than a luxury for many children and parents in our community! My family's decision to relocate to Cupertino three years ago was guided by two primary factors: Tessellations School and the presence of a robust Little League baseball program (my son plays in Cupertino Little League). In fact, this year alone, two of my kid's classmates, made the decision to move to Cupertino to be closer to the school. This underscores the appeal and importance of Tessellations, with the potential for more families to choose our neighborhood as their home.

I would like to highlight that, in my daily commute past three of our outstanding schools – Monta Vista High, Lincoln Elementary (on McClellan), and Kennedy Middle School (on Bubb) – I have observed that Tessellation School's traffic management has had no discernible impact. The administration has proactively implemented state-of-the-art technology and efficient protocols for drop-off and pick-up, along with staggered timings.

Furthermore, the school consistently communicates with the community through email campaigns to raise awareness of any potential issues. The Tessellation community is appreciative of Cupertino city leaders allowing them to use the Regnart Elementry campus and has consistently demonstrated its commitment to being a productive member of our community since its inception.

I respectfully urge the Council to grant approval for the Conditional Use Permit and parking exception for Tessellation School. By doing so, we can ensure the continued success of this vital educational institution and reinforce Cupertino's commitment to providing diverse and accessible educational opportunities.

Thank you for your time and consideration. I look forward to the Council's ongoing support in maintaining and enhancing the educational fabric of our community.

Best Regards,
Chirag Shah & Jagruti Shah
From: Ling Cheng
To: City Council; Ronald Cheng
Subject: Tessellations" Conditional Use Permit
Date: Monday, December 4, 2023 12:42:12 PM
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Dear City of Cupertino,
We would like to communicate our strong support for Tessellations' application for a Conditional Use Permit.

We moved to Cupertino in August, in order to be walking distance to Tessellations School, which our son is attending. (We both work mostly remotely, so we were flexible.) We started with a rental (on Lindy Lane) within a 15 minute walk to the school to test out the area. Impressed with the area and school, we recently bought a house (21451 Vai Ave) even closer, with a 10 minute walk. The house was unoccupied before we bought it, and the neighbors and former owners were very happy that we will be developing it (e.g. landscaping, adding solar panels) and bringing the sound of children to the street again.

Regarding Tessellations: our son previously attended a Burlingame public school, where his needs were not met. Now at Tessellations, it is clear that he is happier, more confident, curious, and resilient, and has found his people.

His favorite part is “Nature Campus” on Stevens Canyon, which they get bussed to once a week. This is possible because the school is so close to nature, and we believe this develops wonderful formative experiences.

The neighborhood is safe and beautiful, with easy access to hiking, great restaurants, and pools in the summer. Our kids are enrolling in many programs around the area, and we’re excited to get more involved too. We personally believe more Tessellations parents will see the lure of this area and move here too.

Please know if you have any questions, and thank you for reading! Sincerely,
Ronald and Ling Cheng
From: Jennifer Griffin
To: City Council
Cc: City Clerk; [email protected]
Subject: Item Number 11 Cupertino City Council, Dec. 5, 2023 Date: Tuesday, December 5, 2023 7:13:50 AM
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Dear City Council:

I am very concerned with Number 11 from the City Council meeting , Dec. 5, 2023.

Two story adus should not be allowed in the City of Cupertino. What are there Structures supposed to become? Stand alone skinny apartment complexes? These structures can be four feet from a property line already. It they have a second Story they will invade the privacy of adjacent neighbors. They will interfere with Power lines close to them.

If you have two story adus, you have basically built a condo complex on a lot.

There is a new bill that allows all the adus on a lot to be sold separately.

So is this the plan to allow these two story adus to be sold as separate residences? These will have to be metered separately and an HOA formed between the other Adus in the lot. Who will collect the money for the HOA fees? There has been no study session to allow the public to weigh in on issues Such as two story adus. The plans for two story adus were added into the Planning Commission on November 14 at a very late hour. There has been no outreach to the Public.

I am really concerned that the public had no idea two story adus were going to be brought up By two members of the Planning Commission. There was absolutely no mention of it, yet all these letters From Cupertino4All and other people that were identical letters came flooding in before the meeting.

How did they know these two story adus and other adu changes were being introduced at 11:30 PM? Did someone tell them before and not mention it to the general public? It seems very peculiar etc.

My brother had adus added to his street in Portland. There are so many sure the street parking is gone because People who live in the adus have no place to park their cars. Two story adus might have Three or four residents. They may have two or more cars. These cars will be parked on The Neighborhood streets.

I don't think having two story adus are a good plan for Cupertino. It is like the City was setting Up to sell the adus in future. This will cause innumerable issues that have not been studied Or resolved. Apparently, one group of people were told about the two story adus before the Meeting, but no one else. This whole item should be postponed as something shady may be Going on.

Sincerely,
Jennifer Griffin
From: Kiran Arora
To: City Council
Subject: Support for Tessellations: Conditional Use Permit & Parking Exception Date: Monday, December 4, 2023 11:10:29 PM
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Dear Cupertino City Council,
An instrumental factor in our decision to purchase a home in Cupertino in 2012 was its reputation for excellent public schools. My husband and I both attended public schools from kindergarten through graduate school and we are very strong believers in, and supporters of, public education.

We have always wanted to be closely involved in our child’s education, and after two magical years at Cupertino Cooperative Nursery School (CCNS), we were so happy to be able to enroll our daughter at Christa McAuliffe Elementary School. We love the parent-participation model that is foundational to the close, inclusive, and supportive community that is McAuliffe.

Our daughter had two wonderful years at McAuliffe. Her first grade teacher in particular was phenomenal.

During second grade, it became clear that in order to thrive, our daughter needed a deeper and broader educational curriculum and greater intellectual challenge. We searched extensively for gifted programs in the public school system; unable to find such a program, we started to consider private educational options.

We were so fortunate to find that Tessellations, a school specializing in meeting the intellectual and social-emotional needs of gifted learners, had recently been established in Cupertino. It has been a wonderful fit for our child in so many ways. She is very happy at Tessellations and is thriving. Had Tessellations not been available to our child, we may have had to consider moving out of Cupertino to meet her educational needs. So many families at Tessellations found their way there after experiencing similar circumstances. Tessellations fills such an important need in the community and is an invaluable asset to Cupertino.

Since its move to the former Regnart campus, Tessellations has proactively reminded our whole school community of multiple ways to be respectful, responsible, and kind neighbors to the surrounding community. We have been especially encouraged to be very mindful of where and how to appropriately park to minimize any inconvenience to the surrounding community. The school has also worked diligently to optimize and streamline the drop-off and pick-up process.

We are very grateful for Tessellations’ location and the surrounding community. We respectfully ask that the City Council please approve the Conditional Use Permit and the parking exception for Tessellations.

Thank you for your consideration.

Sincerely,
Kiran Arora & Ketan Patel
22845 Poplar Grove Square
Cupertino, 95014
From: Meiyu Lu
To: City Council
Subject: Please approve the conditional use permit and the parking exception from the Tessellations school Date: Monday, December 4, 2023 11:07:12 PM
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Dear Cupertino City Council Members,
Hope this letter finds you very well!
We are residents in Cupertino City, living at 21614 La Playa Ct. We bought this house in 2020 with the hope to have my daughter attend the Regnart Elementary School.

However, as you know Regnart Elementary School was closed in 2022 due to the lack of enough registered students. We were so sad at that moment. And then in the spring of 2023 we were so excited to know that Regnart campus was leased by Tessellations so we immediately registered my daughter. So far she loves the school so much and she is super excited to go to the school everyday.

Cupertino city is very well known for its excellent public schools, however, unlike surrounding cities like Sunnyvale, Santa Clara, Los Altos and Saratoga, there is almost no private elementary and middle school in the city. With the addition of Tessellations, Cupertino is becoming more attractive: I’ve already heard people talking about Tessellations and showing their interest to move in here.

We go to the Regnart playground very often after the school hours and are socially connected with many neighbors living nearby. Everyone is so happy to see what Tessellations have done for the school playground and field: play structure and the school field are improved and very well maintained, with plenty of plants and trees planted after the school moved in, people are enjoying the place even more.

Regarding parking, I have seen countless efforts that Tessellations school has made to reduce the impact to surrounding neighborhoods as much as possible, highlighting a few from my memory but the whole effort is far more than what is listed here:

Firstly, the Tessellations school carefully chooses the pick-up and drop-off time which is different from the other schools in the same area, with the aim to reduce the traffic volume in the neighborhood. Actually based on my daily observation, this is working really well: I have seen bad traffic jams on Bubb road near John F. Kennedy Middle School almost every day around 8:30-9am, the Tessellations school area traffic is much much better.

The school is greatly encouraging students who live nearby to bike/walk/scooter to school instead of driving. We live nearby, and we have tried many times to bike/walk to school, and we see many other families do the same thing as well.

For the families who have to drive to school, the school is using a pick-up/drop- off app to speed up the drive-through drop-off and pick-up procedures. They even experimented with the procedure in the first month of school to optimize the whole process with numbered and batch processing, which eventually turns out to be a very effective and efficient method. What a scientific way! Only families with small kids (i.e., kindergarten and 1st grader students) are allowed to park in the neighborhood and walk the kids to the classroom.

Families with bigger kids are strongly recommended by the school to use the drive-through procedure, unless there is some special case. What is more, the school is constantly emphasizing the important notices to families who have to park in the neighborhood to keep at least 5ft away from residential driveways.

For some school activities, I have seen that the school is always planned well ahead with detailed parking maps and many staff on site to direct and guide the traffic during the activity.

Based on the above information, we strongly urge the Cupertino City Council to approve the conditional use permit and the parking exception from the Tessellations school.

Thank you for your support!
Best Regards,
Meiyu Lu & Feng Guo @ 21614 La Playa Ct
From: Maha Baimyrzaeva
To: City Council; Uygar Oztekin
Subject: Please approve the Conditional Use Permit and the parking exception for Tessellations School Date: Monday, December 4, 2023 8:50:18 PM
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Dear City Council members,
We just moved to Cupertino, 1122 Yorkshire dr, from Sunnyvale, because our kids go to Tessellations School and we wanted them to be able to walk to school.

We are writing to request approval of the Conditional Use Permit and the parking exception for the school because the school serves an undeserved population, has been a very responsible tenant, and has an exceptionally capable and responsive leadership committed to developing best solutions that satisfy needs and interests of all stakeholders.

Thank you for considering our request.

Warmly,
Maha Baimyrzaeva, PhD
Uygar Oztekin, PhD
From: Nam Raghvendra
To: City Council
Subject: Supporting Tessellations School
Date: Tuesday, December 5, 2023 9:37:14 AM
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Hello,
We are writing in support of Tessellations School. Our son, Avi Mittal, is in the 2nd grade at Tessellations and this is our second year at the school. Our son is asynchronous in his development, so we struggled to find a school that could be a good fit for him. When he constantly complained of being bored and wasn't engaged, we had started believing that the problem was with our son and we would need to homeschool him. We consider ourselves very fortunate to have found Tessellations, where our son is thriving. He is so happy and excited to go to school every day. We are currently Palo Alto residents but actively considering moving to Cupertino to be close to school and hoping for our youngest to also attend the early school at Tessellations.

We have really enjoyed our time at Tessellations. It is a wonderful, magical place for children who are gifted learners. So we would like to request you to please approve the Conditional Use Permit and Parking Exception for the school. Please don't hesitate to contact us via email or at 847-909-2197, if you need anything from us - happy to send more details or speak in person.

Thanks very much for your consideration,
Raghuendra Mittal (Head of Corporate Development, Lowe's Corporation) Namrta Raghvendra (Product Marketing Lead, Meta)
From: Rhoda Fry
To: City Clerk; City Council
Subject: City Council Agenda Item #10 Conditional Use Exception Date: Tuesday, December 5, 2023 3:00:55 PM
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City Council Agenda Item #10 Conditional Use Exception

Dear City Council,

I am deeply troubled by this request for an exception. Let’s say you had a property owner who leased their property to a business that could not accommodate all the traffic that it would generate without going to the City? What would you do? Would you inconvenience all of the residents for the sake of the business? I would hope not. That would break the City’s Strategic Goals spelled out on page 29 of our City’s 2023/2024 Budget in “Furthering the health and well-being of all Cupertino community members. Air Quality Public Safety …”

What you are proposing here is imposing more traffic on residents in a densely trafficked area and permit parking on certain residents, which is a huge hassle - - - especially if you have more than two vehicles visiting a home. In this case, it was the Cupertino Union School District that leased a site to a private school without doing due diligence. This is not okay.

And what will happen if the church decides to sell off part of its parking lot for housing? This is where the overflow parking will be for two years. What about beyond that? Over 20 years ago, a church property was sold in Cupertino and replaced with a number of homes – this is not a far-fetched idea. Evidently, an idea has been floated to park staff cars in a park if the church parking goes away and that will inconvenience even more people.

And there’s more – the new student population is being compared with the former student population. But the difference is that the new student population would comprise of more commuters than children walking/biking to school from the neighborhood. Please be transparent with the true impacts. And yes, Transparency is another one of our City’s published Strategic Goals.

Please make sure that the school has in place their own carpooling infrastructure closer to where their staff lives rather than placing the burden on residents.

Thanks,
Rhoda fry
Cupertino City Council12/5/23 Hearing

Tessellations Overview
● Non-proﬁt (founded 2020)
● Serving the gifted population
● Progressive
● PK-9th -> PK-8th
Giftedness
Giftedness is asynchronous development in which
advanced cognitive abilities and heightened intensity
combine to create inner experiences and awareness that
are qualitatively different from the norm.

Columbus Group (1991)
Giftedness
● Different academic needs
● Different social emotional needs
○ Intense
○ Sensitive
○ Highly empathetic
● Intrinsically motivated
● A “left-behind” population
● An at-risk population
● An important population

Community

Community
● Other-oriented (empathetic)
● Leave things in better stead

Community

Impact on Public Schools
● 5% of T essie students live in Cupertino
● K-8th: 9 students (compared to 14,000 in CUSD K-8)
● High school at capacity: 15 (compared to 9,000)
● Over half come from other private schools
● “Stealing” <.5 students from Monte Vista per year
● Different population

Transportation & Parking Eﬀorts (Staﬀ)
● Carpools: 19 in 7 vehicles and climbing
● Bike/walk: 12
● Relocated less-frequently-used vans
● Back lot (blacktop)
● Shuttle service expandable as needed
● Zero staff impact on neighborhood parking
● Open to future changes / suggestions

Parking/Traﬃc Pictures

Parking/Traﬃc Pictures
12/4/23: During a workshop for prospective kindergarteners! Transportation Eﬀorts (Students)
● Carpools: Varies - currently over 25%
● Utilize Rainbow (very light trafﬁc)
● Vanpool starting soon
● DashPass
● 7 families (and counting) within walking distance + 4 biking ● Outperforming many public schools (<80% drive)
● Always Iterating

Neighborhood Survey Results
● 220 houses
● 25 responses (so far)
● >80% use campus
● 70% of above use it for
exercise
(kids are next highest)

Neighborhood Survey Results
What do you think about parking and trafﬁc in the neighborhood? I’ve always been satisﬁed with the parking situation.

I was annoyed when you moved in, but it’s a lot better now and I’m satisﬁed with the current situation.

I’m slightly annoyed, but I understand that there will likely always be a school here so it comes with the territory.

I’m frustrated by the current situation and would like to see more improvements.

I wish the school would remain vacant like it was last year.

Taking Care of Our People
● Family attrition 4%
● Job Applications 1700+

Cupertino +
● Proud to be in Cupertino
● Making Cupertino Proud

Thank You

Appendix
Slides after this point are optional.

Sign Clarity

From: Bindeeya Desai
To: City Council
Subject: comments for Dec 5 Public hearing on MCA-2023-003, U-2023-002, EXC-2023-009 Date: Tuesday, December 5, 2023 4:04:45 PM
Attachments: comments for Cupertino City Council hearing on Dec 5, 2023- Bindeeya Desai.docx Marked up plan- Regnart school property- Bindeeya Desai.pdf comments for Cupertino Planning Comission hearing on Nov 14, 2023- Bindeeya Desai.docx CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

To Cupertino City Council,

Please find attached file as part of my comments for the above mentioned public hearing:

1. word document with comments for Dec 5 public hearing

2. word document with past comments on Nov 14 public hearing

3. pdf marked up plan- submitted to Planning Division for the Planning Commission hearing on Nov 14.

Thank you,
Bindeeya Desai

TO: Cupertino City Council
FROM: Bindeeya Desai
DATE: Dec 5, 2023
SUBJECT: Comments for public hearing on Dec 5 for Application No. MCA-2023-003, U-2023-002, EXC- 2023-009 in BA zone

Please refer to report made by Planning Division
Emi Staff Report for
Dec 5 council hearing.
. It ignores and omits many important
details that were pointed out at the Nov 14 hearing.

I would like The City Council to consider these 5 points in bold text below.

MCA-2023-003:

Page 2 ends

owned by CUSD and FUHSD. As of now, only 9 out of 14 CUSD/FUHSD properties are still in public use. In 3 years(2027), with 23% loss anticipated, 14 will become only 7 in ‘public use’.

1. CUSD & FUHSD will loose HALF of their properties to private uses. This kind of loss equates to loss of open spaces and livable neighborhoods especially when the volume of cars operational in quiet neighborhood streets is colossal. This is significant enough to require CEQA review on proposed traffic implications on the neighborhoods of The City of Cupertino, also when the guidelines of the general open space plan are not being met.

The Planning Division assumes no responsibility for the impact of traffic on the neighborhood by stating “CUP & EXC involves only minor physical changes to the site”. This statement is simply not true for the neighborhood. The City does have responsibility for the neighborhood, not just development on the site.

U-2023-002, EXC- 2023-009:

Page 7 ends

“Strategy RPC-2.1.2: Public Use of School Sites to allow for the public to use [the] sites, when not in use by schools,
 Policy RPC-8.1.2: School Expansion. Encourage schools to meet their expansion needs without reducing the size of their sports fields.
 Goal RPC-8: Cooperate with school districts to share facilities and meet community needs. “

“Tessellations’ proposed hours of operations are Monday through Friday from 6:30 a.m. to 9:00 p.m., with typical school operations, including the afterschool program, occurring between 7:30 a.m. and 6:30 p.m. Classes begin at 8:15 a.m. and end at 3:15 p.m. and staff is expected to arrive between 7:00 a.m. and 7:30 a.m.”

2. Why is the public prevented from using the open spaces Yorkshire Park and Yorkshire Playground between 4pm to 8am M-F and all times on weekends when the school is not operational? This is what the neighborhood shared prior to 2022 and should not be any different.

Page 7 ends

• “Pick-up for the after-school program is proposed to occur through to 6:00 p.m. • Student drop-off and pick-up is proposed to occur entirely on the school site • pick-up process has seven staff assigned to monitor traffic and ensure safety.

3. The above statements are not true. Parents park on resident curbs at pick- ups at 3.30 & 6pm and sometimes at drop-offs as well. There is no staff present at pick-up for afterschool and there is no pick up loop for after school. Parents have not been instructed to not park on resident curbs and to go through the dropoff/pick up loop. We have sent several photos as proof. This has to be addressed for the CUP and EXC. Moreover, there is a “hazard” using the black top for vehicles- parked or moving. Besides, the black top is a “play”ground, not for parking vehicles!!

• As of now, there is no staff monitoring pick-ups between 4- 6 pm. • Parents still park on Yorkshire- north and west side on resident curbs at pick up times-

3.30pm and after 5pm. Agreed, it is less but I saw about 4-6 yesterday at 3.30pm when their parking lot was mostly empty!. Parents have not been instructed to not park on resident curbs. How will this stop if it is not even mentioned in CUP or EXC??? • The right turn into the black top is a blind turn- no staff monitoring- at one time last week there were 5 parent cars lined on fire lane requiring reversing to allow cars to get out. On that driveway, two vehicles cannot pass through gate at the same time. This is a hazard.

4. The pick-up loop at main parking lot must be used for after school pick-ups and parents must not park on resident curbs if drop off/pick-up loop is effective.

• I have noticed, at 8am, roughly 5 out of 7 staff cars parking on black top, drive and turn at higher speeds than acceptable around schools. There are no signs in the school zone that limit speed to 15mph, so it is assumed that the limit is 25 mph. I don’t have a speed checker but the 2 who were driving perfectly slow were a good bench mark against the other 5 who suddenly slammed breaks upon noticing me.

5. There must be a sign post – speed 15mph around school zone

TO: Cupertino Planning Commission
FROM: Bindeeya Desai
DATE: November 14, 2023
SUBJECT: Comments for public hearing on Nov 14 for Application No. MCA-2023-003, U-2023-002, EXC- 2023-009 in BA zone

I appreciate The Planning division’s recommendation to go forth with Tessellations parking exception permit which is essentially based on neighborhood and community oriented values.

It is these values that make our neighborhoods and our cities livable.

They are:

1. Public use of BA zoned Regnart site

2. Preserving the open spaces, we fondly call “The Yorkshire Playground”(which is the play field and courts) and “The Yorkshire Park” (the front lawn area)

3. Using alternate systems to avoid vehicles on site and on our streets, keeping our neighborhood uncongested and peaceful.

However, when I look at the EXC application proposal, I see that public use and open spaces have been compromised and alternate commute systems are far from adequate.

1a. At first, neighbors were not permitted to use the site 6am- 6pm M-F. The City helped us to somewhat straighten that out. However, the school is in session 8am- 3.30pm M-F, but posted signs display longer hours. This prevents public use of site longer than necessary.

1b. The site, it’s use and the recommendation for granting of EXC by Planning division have all been based on using the role model of Regnart and its operations. Regnart had no more than 2 large local student family events where the play court area felt like a wonderful open air stage where performances/fairs were held while neighbors could watch, participate, or still jog on the field. Tessellations’ “numerous” events will fill all of Yorkshire Playground with vehicles, which occur on weekdays and weekends and last up to 9pm. This prevents public from using any part of this open space when they are allowed to.

2a. Yorkshire Playground is the heart of Regnart campus and neighborhood. It is a safe place to be with no vehicle or road in sight and a 360 deg. view of mountains. It is used by all age groups from our community. The basketball courts are a favorite among high school kids, ex-Regnart students now in college, and families who come all the way from Stelling road. Yorkshire Park with its impressive row of trees and lawn is a landmark, a photo spot in fall, and a rest stop for one and all - birds including owls, deer, visiting duck family from Seven Springs pond, dog walkers, pram walkers, wheelchair users, elderly couples, free play, and even picnic lunch stop to our mail carrier who lays down a cute blanket under the shade. Planned school events must involve the use of these open spaces by Tessellations families, not their vehicles. It is unacceptable to consider parking even temporarily in these two open spaces without robbing the neighborhood, the school campus itself, and the City at large of this most valuable resource.

2b. The proposed shade by the multipurpose room is consistent with the use of this open space and must be permitted.

3a. While offsite parking and shuttle vans, car pools, etc. are excellent ways to reduce traffic and related pollution, they have been accepted without exploring their fullest potential.

Multiple satellite parking/shuttle options for all their “numerous” event related needs have not been considered.

3b. The multiple and unspecified number of events occurring when school is in session or not in session can also be managed without impairing open spaces by toning down the attendance at all events to no more than 50 persons at a time who can be shuttled from off-site parking locations without much impact to the neighborhood environment.

3c. The potential on this site to accommodate Tessellations’ everyday parking needs have also remained largely unexplored. Tessellations has employed car pool and off-site parking currently but it is not very effective. Kindergarten parents (later Pre-school parents too) continue to park on Yorkshire Drive around Yorkshire Court and beyond. Staff and base camp parents (and other vendors/sublease in future) continue to park on Yorkshire Drive around north gate maintenance and fire access, some parking for many hours and beyond 6pm, others in a ‘no stopping anytime’ fire lane with multiple signs prohibiting parking. Base camp and other vendors have to be bound by the same alternate systems of shuttle and drop-off/pick-up drive through at existing main entrance parking lot.

Please see the attached marked up plan that highlights the above mentioned values, and explores the site’s potential in expanding existing parking on site without abnormally impacting open spaces and the neighborhood.

Lastly, I understand that this is not a public hearing for neighbors requesting permit zone on our streets, but these issues are related and need to be addressed in due course. If current commute/parking proposal is granted as is, neighbors will require the consideration of a 12 hour permit parking or a tow away zone. Permit zones are neither a practical nor an aesthetically pleasing solution on our wonderful streets, but inevitable if the Planning division and The City Council approves this application without giving Tessellations another chance to provide viable and dependable transport systems for all its year round, daily, vendor, sub-lease, and numerous event related needs.

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GUIDED LEARNING CENTER
TYPE V - 1 HR
13,625 S.F.

DSA #51783

MULTI-USE
DSA #31225
23 TYP.
27 26
30 29
28 20
21 22
23 11TYP.
8 6
7 15
15 3
8 6
6 17
17 15
15 8
DSA #51783
DSA #51783

REGNART ELEMENTARY SCHOOL - SITE PLAN
SCALE: 1"=30'-0"PLAN NORTH
(E) PLAY FIELD
1920
1920
19 19
19 19
1214 TYP.
99 9
99 10
9 10
(E) LAWN
19 14
14 16
16 16
14 (E) TURF
(E) LAWN
14 16
14 12
14 14
(E) TURF
19 TYP.
3 4
21 TYP.
(E) LAWN
(E) LAWN
EDGE OF (E) A.C.

PAVING
18 33
16 (E) TREE TO
REMAIN
(E) IRRIGATION
EQUIP.
(E) CONC.

PLANTERS

TO REMAIN
19 12'-0"
DSA #55794-
SIM. TO DET
8/A1.2
29 15
PARKING RATIO:

TOTAL PARKING SPACE: 53
TOTAL DA SPACE: 4 (REQ'D 3)
DSA #51783
DSA #51783
DSA #51783
DSA #51783
2 2
2 DSA #55794
DSA #55794
DSA #55794
DSA #51755- SIM.TO 7/A1.2
TYP.
3 (E) SHADE STRUCTURES

TYPE V - N
1,600 S.F.

DSA #112993
22 1
A1.2
ACCESSIBLE PATH OF TRAVEL: A BARRIER FREE ACCESS
WITHOUT ANY ABRUPT VERTICAL CHANGES EXCEEDING 1/2" AT
1:2 MAXIMUM SLOPE, EXCEPT THAT LEVEL CHANGES DO NOT
EXCEED 1/4" VERTICAL. MAXIMUM CROSS SLOPE OF 2 % .

ARCHITECT AND CONTRACTOR TO VERIFY THAT ALL BARRIERS IN

THE PATH OF TRAVEL HAVE BEEN REMOVED PER SECTION
1133B.7
LEGEND:

EXISTING BUILDINGS TO REMAIN ( NO WORK TO BE DONE)
SITE PLAN NOTES:

SCOPE OF WORK
(E) VAN ACCESSIBLE PARKING SIGN.
(E) D.A. TOWAWAY SIGN.
(E) D.A. PARKING SPACE.

GENERAL SHEET NOTES:
(E) PATH OF TRAVEL IS FLAT, APPROX. 0.5-1% WITHOUT
ANY CROSS SLOPE EXCEEDING 2%, OR ABRUPT CHANGES
IN LEVEL; MIN. 8'-0" CLEARANCE; (E) NON-SKID LIGHT
BROOM FINISH CONC.; WITHOUT ANY STEPS, RAMPS OR
STAIRS.

A.
(E) FIRE HYDRANT.
(E) D.A. DRINKING FOUNTAIN.
(E) TREE WELL / PLANTER.
(E) VAN ACCESSIBLE PARKING SPACE.
(E) ACCESSIBLE RESTROOMS

PROPERTY LINE
(N) A.C. PAVING

CONTRACTOR TO PROVIDE TEMPORARY CONSTRUCTION
FENCE PER DETAIL 10/A1.2, REVIEW LOCATION WITH THE DISTRICT.

D.
(E) D.A. PARKING SIGN.
(E) STUDENT TOILETS- SEE FLOOR PLANS
(E) STAFF TOILETS- SEE FLOOR PLANS
(E) CHAIN LINK FENCE.
(E) COVERED WALKWAY.
(E) A.C. PAVING TO REMAIN.
(E) CONCRETE PAVING TO REMAIN.
(E) DSA APPROVED CONCRETE CURB CUT.
(E) PLAY AREA.

CONTRACTOR TO MAINTAIN THE PATH OF TRAVEL WITHOUT

CREATING ANY OBSTRUCTION DURING CONSTRUCTION
PHASE.

SEE STRUCTURAL, ELECTRICAL, MECHANICAL, AND PLUMBING FOR MORE INFORMATION.

C.
(E) AC PAVING.
(E) AC TOPSEAL OVER (E) AC PAVING.
(E) GAME LINES.
(N) CONC. PAVING
(N) TURF AT PLAY FIELDS.

ASSUMED PROPERTY LINE
(E) 3' x 3' D.A. PAVEMENT SYMBOL PER CBC.SEC.1129B.5.
(E) COVERED FABRIC SHADE LUNCH AREA.
(E) LANDSCAPED AREA.
(E) PLAY EQUIPMENT, FURNISHED & INSTALLED BY SCHOOL DISTRICT.

NOT USED.

REMOVE D.A. PARKING SIGN AND PAINT OVER D.A. PARKING SYMBOL.

RELOCATED VAN ACCESSIBLE PARKING SIGN.
(E) STRIPING @ D.A. PARKING.
(E) CONCRETE PAVING.
(E) EQUIP. CONC. PAD W/ EQUIP. FENCE.
(E) CONTAINER TO BE MOVED BEFORE (N) A.C. PAVING WORK IS DONE, RELOCATE PER SCHOOL DISTRICT.
(E) PARKING SPACE, STRIPING AS SHOWN.
1 HR RATED WALL
2 HR AREA SEPARATION WALL
E.PROVIDE SIGN ON OR ADJACENT TO GATES WITHIN PATH OF TRAVEL STATING THAT "THIS GATE IS TO REMAIN LOCKED IN OPEN POSITION DURING SCHOOL/BUSINESS HOURS OR DURING A PUBLIC FUNCTION" 32 33
31 30
29 28
27 26
25 24
23 22
20 19
18 21
14 17
16 15
10 11
12 13
6 7
9 8
4 5
3 2
1 (E) SIGN STATING " ACCESSIBLE LOADING ZONE".34
EXTERIOR PAINTING : PAINT ALL PERMANENT BUILDINGS, RELOCATABLES, COVERED WALKWAYS AND CANOPIES, SEE SPECIFICATIONS.

Cupertino, Ca 95014

FABRIC SHADE
1170 Yorkshire
10582 STERLING BLVD.

S A N JOSE , C A 9 5 0 1 4
T 4 0 8 . 4 1 0 . 3 4 4 1
[email protected]
i PARCH ARCHITECT
A1.1
[email protected]

REGNART SCHOOL
(408) 891-8702
43-13
01-xxxxxx

IDENTIFICATION STAMP

DSA FILE NUMBER
DATE______________________
DIV. OF THE STATE ARCHITECT
APPL.#
AC _____ FLS _____ SS_____

TESSELLATIONS SCHOOL
Cupertino School District
caroline.gupta@
tessellations.school

STRUCTURE

SITE PLAN

CC 12-05-2023
Item No. 11
Two-Story Permit and
ADU Ordinance
Written
Communications
From: Kendra Rosenberg
To: Piu Ghosh (she/her); Lauren Sapudar; City Council; City Clerk Cc: Permit Center
Subject: ADU Ordinance adjustment considerations - 10490 San Felipe Rd. as an example Date: Monday, November 27, 2023 10:58:50 AM
Attachments: _10490 San Felipe_CC Petition.pdf
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Council Members,
As you consider the adjustments to the ADU ordinances for the City of Cupertino, I would urge you to consider an addendum for a specialized situation that occurs in your city. There are a series of properties that were built legally in their time with extra tall "crawl spaces". Per current City language, these spaces do not qualify as basements, as they are typically fully exposed on one or more facades, nor do they qualify as a legal story to the house, as they are typically partially buried and designated uninhabitable spaces (no insulation, few to no interior walls, no floors, etc.). However, many of these extra tall crawl spaces have ceiling heights of over 7', and some up to as tall as 10', as is the case with my client on San Felipe Rd.

We are urging the City Council to allow for these legally constructed extra tall crawl spaces to be permitted to be converted to ADUs. State law allows for attic conversions, and basement conversions, but Cupertino's specialized designation of these spaces as "crawl spaces" prevents them from being fully utilized. As an example, I have attached a proposed site plan for this property. If the client built a detached ADU under current rules, they would consume the red portion of the site, being closer to their neighbors, disturbing more earth, and requiring a greater financial cost, as all parts (such as foundation) must be new. Should they be allowed to convert their crawl space to an ADU, they could use only the yellow portion shown, resulting in no ground disturbance, less disruption for the neighbors, and reduced costs for the clients by being able to utilize existing exterior walls and foundations.

A few other items of note for this specific case, which may influence your specific language when writing the ordinance:
- The existing crawl space was legally built
- There will be no additional square footage added beyond the existing footprint - There will be no significant additional digging down underneath the house (only as needed for foundations)
- The resulting ceilings will be 8'-0" or greater, as existing conditions permit.

In summary, I would request that the City Council add language to their ADU Ordinance to allow for the infilling / converting of extra tall crawls spaces to become ADUs.

Thank you for your time and consideration.

Best,
Kendra Rosenberg
KNR Design Studio
Palo Alto ARB Vice Chair
________________________
Letter from the client originally sent to the city in June 2020:

Dear Members of the Council,
I, and my husband Yuan-Chin Wang, am writing to respectfully request the consideration of allowing an ADU to be built in our existing, legal/permitted crawl space.

I have lived in this area since I was two years old. I attended John Muir Elementary, Miller Junior High, and Lynbrook High School. I grew up shopping at Vallco, eating at Cupertino village, and taking summer classes at De Anza college. My husband and I started looking for our “forever home” in 2015 when I became pregnant with our first child. I knew I wanted to stay in this area -- so much so that my husband teased me for not really being open to considering houses in other locations. With the high quality of life and amazing schools, I’ve always known I wanted to raise my family here. We moved into our home at 10490 San Felipe Road just a few weeks before welcoming our son, Aston, in late 2015. Since then, we have added two girls to our family -- Aston is now 4, Karly is 2, and Haley is 10 months old.

We have been very lucky to have family nearby, and it is the top reason we want to have the ADU. My parents live in Saratoga, and have been an invaluable help as we raise our three young children. My husband and I both work full-time in tech, and his career in particular has required late night customer events and international business trips, so my parents often help with staying with me when my husband is out of town or working late. My husband’s parents live in LA, but frequently come up to visit not only us but his sister and her family, who live in nearby Los Altos. His parents more recently have considered moving up here, not only to be closer to their children and grandchildren, but also for the additional support. My mother-in-law was diagnosed with Alzheimers about five years ago, and her condition has accelerated in recent years. In LA, my father-in-law is solely responsible for her, so they are looking for at least extended stays with us so we can lend help.

With the new ADU rules, we thought we had found a great solution. However, a separate detached ADU would consume a significant portion of our backyard, reducing the space for our children to play. It would also be on the downhill side of the house and close to our neighbors, which would be more disruptive to them.

We are lucky enough to have a full height (legal) significant "crawl space" beneath our house. Our crawl space has 8' clearance in most places, and up to 10' in some areas. There are existing walls and floors already in place. This seems an ideal location for the ADU: it is closer than a separate structure, more space efficient for the property, and much more cost effective for our family, since the primary structure already exists. We would simply be finishing the interior areas and making the space habitable.

We worked with our designer and developed an ADU floor plan. However, after being reviewed by a member of the Cupertino Planning/Building staff, we have been informed that it will not be allowed as it would make the crawl space into a third floor, which Cupertino does not permit.

The new ADU rules of California make exceptions for ADUs built into existing attics.

We are asking the Council to consider that this is a comparable situation, and would be highly beneficial for all parties involved.

We sincerely appreciate your time and consideration.

Respectfully,
Angela Cheung & Yuan-Chin Wang
--
Kendra Rosenberg
KNR Design Studio
[email protected]
650-308-8745
478
484
482
480
472
470
480484
482476
472
470
468466
478
476
474
480
474
SAN FELIPE ROAD (20')4"6"FRUIT
6"OAKM-FRUIT8"FRUIT8"FRUIT
21"CEDAR

M-FRUIT
23"CEDAR8"TREE8"CYPRESS
7"FRUIT
18"OAK
24"OAK
15"15"OAK
14"OAK
8"FRUIT
RP=508.14

TWO-STORYSTUCCOHOUSE
GARAGETOS=482.51
RP=509.23

PLANTER

LAWNNEIGHBORINGHOUSE

CONCRETEDRIVEWAYSLOTDRAIN

RAISEDWOODDECKRAISEDWOOD DECK

WOOD STEPS

WOODRETAININGWALL

RETAININGWALL,TYP STEP

CONCRETE

GRAVELPATH

ROCKBORDER

CONCRETE

GUARDRAIL
FENCECHANGE5' IRONFENCE6'WOODFENCEFENCECHANGE
7'WOODFENCE
GATE
7'WOODFENCE

CONCRETECURB&GUTTER

ASPHALTBERM

CONCRETE CURB & GUTTER
6"VCP

NEIGHBORINGDRIVEWAYACCESS

NEIGHBORINGCONCRETEDRIVEWAYACCESS
W1
W2
W3
W4
W5
PUBLIC ROADWAYDOC.# 6636971(EXCEPTION #6)
14' INGRESS/EGRESSFOR THE BENEFITOF LOT 215 (P-MAPS-13)DOC.# 6991101(EXCEPTION #7) PUBLIC ROADWAYAND UTILITIESDOC.# 8130250(EXCEPTION #9)
120.0000 PUBLIC UTILITYAND APPURTENANCESEASEMENTDOC.# 8893813(EXCEPTION #10) EXCLUSIVE EASEMENTFOR THE BENEFIT OF22766 ALCALDE ROADRIGHT-OF-WAY, INSTALL POWER,DRAINAGE, SEWER AND PIPELINE,RIGHT TO PLANT VEGETATIONNO STRUCTURE OR LIVING THINGTO EXCEED 14' HEIGHTDOC.# 10359870(EXCEPTION #12) 240.0000 R.O.W.PER 837-M-36
240.0000 R.O.W.PER 837-M-36
LANDS OF CHEUNG & WANG8,926± SQ.FT. GROSS0.20± ACRES GROSS

LANDSOFDHAMDHERE

LANDSOFBROWNE

LANDSOFCOALSON
S89°40'00"E 86.42'
S00°00'00"E 109.00'
N89°40'00"W 77.36'
N04°44'57"W 109.43'

PROPOSEDADU IN CRAWLSPACE BELOW

ALTERNATEADU INBACKYARD
All drawings and written material appearing herein constitute original and unpublished work of KNR Design Studio and may not be duplicated, used, or disclosed without written consent.© 2020 KNR Design Studio SheetScaleDateProject13.JUL.2020CHEUNG-WANG RESIDENCE
No.DateIssues and Revisions
10490 San Felipe Rd.Cupertino, CA 95014Cheung-WangRESIDENCE Accessory Dwelling Unit (ADU)APN: 342-44-023
AS1. 1Site Plan with ADU placementExhibit
07/13/20City Council Petition
1ST FIN. FLR. (+0'-0")
ROOF PEAK (+25'-11")
SECOND FLOOR (+8'-6")
2'-2"6'-8"
2'-2"6'-8"
6'-8"(N) ACCESS DOOR TOCRAWL SPACE

NO WORK ONUPPER FLOORS
(N) WINDOWS IN (E)STUCCO SIDING(N) EAST ELEVATIONSCALE: 1/4" = 1'-0"2EXISTING STUCCOWALL TO REMAINEXISTING STUCCOWALL TO REMAIN 1ST FIN. FLR. (+0'-0")
ROOF PEAK (+25'-11")
SECOND FLOOR (+8'-6")
(E) EAST ELEVATIONSCALE: 1/4" = 1'-0"1

EXISTING STUCCOWALLS, BLANKEXISTING STUCCOWALLS, BLANKEXISTING STUCCOWALLS, BLANK All drawings and written material appearing herein constitute original and unpublished work of KNR Design Studio and may not be duplicated, used, or disclosed without written consent.© 2020 KNR Design Studio SheetScaleDateProject13.JUL.2020CHEUNG-WANG RESIDENCE
No.DateIssues and Revisions
10490 San Felipe Rd.Cupertino, CA 95014Cheung-WangRESIDENCE Accessory Dwelling Unit (ADU)APN: 342-44-023
A4.0Exterior Elevations1/4" = 1'-0"01'2'4'8'

AREA OF WORK
From: Jennifer Griffin
To: City Clerk
Cc: [email protected]
Subject: Fwd: Item Number 11 Cupertino City Council, Dec. 5, 2023 Date: Tuesday, December 5, 2023 7:20:45 AM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Please kindly add to the public record. Thank you.
-------- Original Message --------
Subject: Item Number 11 Cupertino City Council, Dec. 5, 2023 From: Jennifer Griffin <[email protected]>
Sent: Tuesday, December 5, 2023, 7:13 AM
To: [email protected]
CC: [email protected],[email protected]
Dear City Council:

I am very concerned with Number 11 from the City Council meeting , Dec. 5, 2023.

If you have two story adus, you have basically built a condo complex on a lot.

There is a new bill that allows all the adus on a lot to be sold separately.

I am really concerned that the public had no idea two story adus were going to be brought up By two members of the Planning Commission. There was absolutely no mention of it, yet all these letters
From Cupertino4All and other people that were identical letters came flooding in before the meeting.

How did they know these two story adus and other adu changes were being introduced at 11:30
PM? Did someone tell them before and not mention it to the general public? It seems very peculiar etc.

My brother had adus added to his street in Portland. There are so many sure the street parking is gone because
People who live in the adus have no place to park their cars. Two story adus might have Three or four residents. They may have two or more cars. These cars will be parked on The Neighborhood streets.

Sincerely,
Jennifer Griffin
From: Kitty Moore
To: Pamela Wu; City Clerk
Cc: Matt Morley; Benjamin Fu; Luke Connolly
Subject: December 5 Item 11 Written Communications and Staff Questions FW: Two Story Adus and Other Agendas Date: Monday, December 4, 2023 7:10:36 PM
Hi,

Thank you for the report for Item 11. The following are questions/comments for Staff and Written Communications.

Question 1:

Which ADU proposals are beyond those in the State requirements?

Question 2:

Do the State ADU requirements sunset?

Question 3:

Is there any particular need for Cupertino to adopt the State law as local law when State law has to be followed?

Question 4:

Please provide any statistics or information to inform us whether anyone is renting these spaces to non-family members. When a property owner adds an attached, detached, and/or JR ADU to their property, does their property value tend to decline or increase? Has the addition of ADUs in Cupertino lowered property values? Did this State removal of local control by the housing laws governing ADUs make housing more affordable?

Thank you,

Kitty Moore

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389

From: Rhoda Fry
To: City Clerk; City Council
Subject: December 5 Agenda 11 changes to ADUs
Date: Tuesday, December 5, 2023 3:05:28 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Council,
Regarding December 5 Agenda 11 changes to ADUs.

In my opinion, any ADU exceeding a single-story must comply with all rules pertaining to single-family homes such as the height, FAR (floor area ratio) and setbacks.

Please adhere to the Strategic Goals set forth in the current budget.

Thanks,
Rhoda Fry
From: Neil Park-McClintick
To: City Clerk; City Council; Cupertino City Manager"s Office Subject: Fwd: (Strengthen Item 4 on ADUs) or (Clarify and Boost ADU Rules) Date: Tuesday, December 5, 2023 3:48:31 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hello. I would like to forward the comments we submitted to the planning commission regarding tonight's related item 11 on the agenda (ADUs and 2 story streamlining).

We support the ordinance as worded. Additionally, an even stronger ordinance would demonstrate to the State of California that we are acting in good faith to do everything we can to meet our local obligations for solving the housing crisis. There is more that could be done in coordination with the new pre-approved selection program for example.

In a time of great potential crisis for the city, it does not make sense to waste city resources on reviewing 2 story permits and minor improvements to homes, when we could be directing staffing resources to more significant potential projects. ---------- Forwarded message ---------
From: Neil Park-McClintick <[email protected]
>
Date: Tue, Nov 14, 2023 at 4:33 PM
Subject: (Strengthen Item 4 on ADUs) or (Clarify and Boost ADU Rules) To: <[email protected]
>, <[email protected]>,
<[email protected]>
Dear Cupertino Planning Commission,
I’m personally glad our city’s planning commission is taking up the revision of ADU rules, with the passage of new state laws requiring cities to relax unnecessary rules. I can personally speak to the need for ADUs as one of many new housing options. When I was a college student, I lived in a garage->ADU conversion, which provided a rental rate almost half of the typical market rate housing option. It was the reason I was able to continue attending school and complete my degree. I believe others should have this same opportunity!
ADUs have shown to be an effective way to house new families and individuals in Cupertino and have generated significant interest from property owners; now the city should ensure all homeowners have an equal opportunity to pursue this desirable use of their land, rather than just those with the means, expertise, and time.

Still, I believe the planning commission should better clarify new ADU rules, while also further empowering property owners to build new homes on their own land. The commission should advise Council on stronger language that:

1. Makes ADU regulations simpler, especially since small property owners are unlikely familiar with complex land use principles. Simplification and alignment with our existing pre-approved ADU ordinance are also essential to ensure the program is better utilized.

2. Provide across the board permission for ADUs to be up to two stories in height, as was intended by the passage of new state laws. There is no reason we should restrict heights for such a small type of housing, which will result in limited new impacts on the community. For homeowners, these restrictions will limit access to opportunity based on neighborhoods, when all should be allowed this same ability. In addition, Cupertino has a uniquely large number of multigenerational families who deserve ample space to live together, with caretakers and other loved ones. Transit oriented development should be focused around true dense, multi family homes, rather than single story additions.

3. In line with the above, we should also increase design flexibility by cleanly allowing for both detached and attached ADUs to accommodate all types of families and homeowners of all backgrounds and situations.

4. Provide the same opportunities for single-story and multi-story single family homeowners.

5. Remove all mentions of proximity to transit within the context of ADUs.

ADUs are an effective, desirable way to better meet our housing needs, without noticeable impacts on neighborhoods, while also placing the financial onus on homeowners, who are demonstrably eager to build these homes. We should be simplifying and incentivizing our ambitious, thoughtful residents, instead of making the process needlessly challenging.

Thank you for your consideration,
Neil Park-McClintick,
from a family of longtime cupertino residents
CC 12-05-2023
Written
Communications
Item No. 13
Update regarding
Vallco's SB 35 project
approval
From: Kitty Moore
To: Pamela Wu; City Clerk; Kirsten Squarcia
Cc: Matt Morley
Subject: December 5 Item 13 Staff Questions and Written Communications Date: Monday, December 4, 2023 10:00:07 AM
Attachments: image001.png
image002.png
Hi,

Thank you for the report on Item 13.

The following are questions/comments for this item as there has been an increase in soil activities on the site:

Question 1:

The soil vapor sampling appears to have been in a random pattern as opposed to a grid, how was this method selected?

Question 2 (after the two maps):

The CMP from February 22 indicates that the PCE (Tetrachloroethylene) found onsite at various locations is assumed to have come from offsite (not referring to the PCE at Sears Automotive). That report is here: https://documents.geotracker.waterboards.ca.gov/esi/uploads/geo_report/9535237014/T10000017167.PDF For the following map numbers shaded in gray are over the Residential Screening Levels for that Compound, this is a map of Soil Vapor testing.

The following map from that report shows potential sources of the PCE (typically used at Dry Cleaners, but is used as a degreaser for Auto shops).

Is it reasonable to conclude that one of these offsite sources has released enough PCE to have contaminated the Vallco site (leaving aside the onsite sources of PCBs, PCE, Benzene, etc.) to the extent that it would be prudent for these sites, like the Holiday Cleaners (which also has an open remediation case), to begin an investigation? Is there something which would encourage the site or sites which have contaminated the Vallco site to begin mitigation?

Thank you,

Kitty Moore

For further reference:

Geotracker: https://geotracker.waterboards.ca.gov/profile_report?global_id=T10000017167

VALLCO TOWN CENTER (T10000017167) - (MAP)

SANTA CLARA COUNTY

CLEANUP PROGRAM SITE (INFO)
OPEN - REMEDIATION AS OF 11/15/2022 - DEFINITION

Kitty Moore
Councilmember
City Council
[email protected]
(408) 777-1389

From: Peggy Griffin
To: Pamela Wu; Albert Salvador, P.E.

Cc: City Clerk; Gerald.O"[email protected]; Benjamin Fu; Luke Connolly; City Council Subject: 2023-12-05 City Council Mtg-Agenda ITEM13-Vallco SB35 Update QUESTIONS and INFO Date: Tuesday, December 5, 2023 9:47:11 AM
Attachments: SMP Approval and Path Forward 12.12.2022.pdf Potential Development Plan Changes Letter 8.22.2023.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

PLEASE INCLUDE THIS EMAIL AND THE 2 ATTACHMENTs TOGETHER AS PART OF WRITTEN COMMUNICATIONS FOR THE ABOVE CITY COUNCIL MEETING AGENDA ITEM.

Dear City Manager Wu, Special Project Executive Albert Salvador and Staff,ci

NOTE: I have copied SCCDEH Case Manager O’Regan and the Cupertino Community Development managers Ben Fu and Luke Connolly since more SB-35 projects may be in the works.

Based on your Informational Memo for this agenda item #13 entitled “Update regarding Vallco’s SB 35 project approval”, the city should have received Vallco Property Owner’s (VPO) application to modify the SB-35 project a second time. Reed Moulds, Managing Director, indicated in his email to City Manager Wu that VPO would submit their modification application yesterday, Dec. 4, 2023.

As you are all aware, the site clean-up plan (SMP)
that was approved by SCCDEH on 12-12-2022 has
conditions of approval based on the project plans and uses. I have attached the SCCDEH clean-up conditions of approval letter and also a link to it.

On July 21, 2023, Representatives of VPO met with the Santa Clara County DEH Case Manager Gerald O’Regan to discuss “certain material changes” to the project plans. The SCCDEH notified VPO and the City of Cupertino via PE Salvador in a letter dated 8-22-2023 that DEH considered the changes discussed “significant deviations from the development plan ” which could
Cause the DEH to rescind approval of the site clean-up plan Cause delays in the construction schedule
Cause possible deed restrictions be placed on the property along with required long-term monitoring/inspections if residual contamination is not removed.

The plans discussed on July 21, 2023 may or may not be what has just been submitted. The staff and DEH will review them.

Although SB-35 projects are ministerial, we appreciate the city attempting to keep the residents informed regarding these projects. In that light, would you please answer these 2 questions so that the public can better understand the city’s process.

Q1: How many times can an approved SB-35 project be modified before it is no longer valid?

Q2: When are modifications to an approved SB-35 project considered significant enough deviations to be a completely new project rather than be accepted as a modification? What are the guidelines for modifications?
DEH considers what was discussed as “significant deviations from the development plan”.

Sincerely,
Peggy Griffin

Letter from SCCDEH warning that plans discussed are “significant deviations” from approved plans
LINK TO GeoTracker letter informing the Vallco Property Owner that project modifications may impact the site cleanup plan
Document entitled “Potential Development Plan Changes Letter 8.22.2023.pdf” from Santa Clara County Dept of Environmental Health (SCCDEH) Case Manager Gerald O’Regan to VPO’s Nandy Kumar
https://documents.geotracker.waterboards.ca.gov/regulators/deliverable_documents/2614820182/ Potential%20Development%20Plan%20Changes%20Letter%208.22.2023.pdf

Vallco SB-35 Site Clean up conditions of approval
LINK TO GeoTracker site cleanup plan conditions of approval entitled “SMP Approval and Path Forward 12.12.2022.pdf”
https://documents.geotracker.waterboards.ca.gov/regulators/deliverable_documents/3407895743/ SMP%20Approval%20and%20Path%20Forward%2012.12.2022.pdf

LINK TO 12-5-2023 City Council Meeting Agenda Item #13 Vallco SB35 Update materials https://cupertino.legistar.com/LegislationDetail.aspx?ID=6436037&GUID=C06401CA-B1AD-481A- AE92-8FB8703CD751&G=74359C04-A5F0-4CB2-A97A-0032996BB90E&Options=&Search= Email from Reed Moulds to Cupertino City Manager Wu
Informational Memo-Update on Vallco SB-35
County of Santa Clara
Department of Environmental Health

Hazardous Materials Compliance Division
Site Mitigation Program
1555 Berger Drive, Suite 300
San Jose, CA 95112-2716
(408)918-3400 FAX (408)280-6479

Board of Supervisors: Cindy Chavez, Mike Wasserman, Otto Lee, Susan Ellenberg, S. Joseph Simitian County Executive: Jeffrey V. Smith
December 12. 2022 APN: 316-20-120

Vallco Property Owner, LLC
c/o Nandy Kumar ([email protected])
2600 El Camino Real, Suite 410
Palo Alto, CA 94304

Subject: Site Cleanup Case Name: Vallco Town Center
10123 North Wolfe Road, Cupertino, CA 95014
Santa Clara County Case No.: 2021-16s

Parcel West of Wolfe Road

Dear Mr. Kumar:

The Department of Environmental Health (DEH) has received the Site Management Plan (SMP) prepared by WSP and dated November 2022. The SMP includes 10 appendices which consist of development drawings, analytical data, site specific attenuation factor calculation information, a sampling and analysis plan, a health and safety plan, a construction management plan, a dust and vapor control plan, and a storm water pollution and prevention plan.

The DEH approves the SMP.

Site Definition

The Site is defined as the property located at 10123 North Wolfe Road, Cupertino, with the assessor’s parcel number (APN) noted above. The Site is located on the west side of Wolfe Road only.

Proposed Project

The Site is part of the larger proposed Vallco Town Center project,which will redevelop the former Vallco Mall located on both sides (i.e., east and west sides) of Wolfe Road. When complete, the proposed Vallco Town Center project will include approximately 5 million square feet of residential area and 2.5 million square feet of non-residential retail and office area. The Site will include approximately two-thirds residential area and one-third non-residential area. The SMP states, the first floor in some of the buildings shall include residential support space (leasing offices, storage, lobbies, etc.). For risk evaluation purposes, the DEH considers the proposed residential support space as a commercial/office use.

The proposed Site development is divided into six blocks (Blocks 1 through 6). A single building ranging from 6 to 22-stories shall be constructed on each block. All blocks shall be underlain by a mechanically Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA December 12, 2022

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ventilated below-grade parking garage. The proposed buildings proposed for each block, from the ground floor and up, are described below

 Block 1 - The proposed building on Block 1 is 8-stories. The proposed first floor development is commercial/office space with residential space on all overlying floors.

 Block 2 - The proposed building on Block 2 is 21-stories. The proposed first floor development is commercial/office space with residential space on all overlying floors.

 Block 3 - The proposed building on Block 3 is 22-stories. The proposed first floor development is residential and commercial/office space with residential space on all overlying floors.

 Block 4 - The proposed building on Block 4 is 11-stories. The proposed first floor development is commercial/office space with residential space on all overlying floors.

 Block 5 - The proposed building on Block 5 is 11-stories. The proposed first floor development is commercial/office space with residential space on all overlying floors.

 Block 6 - The proposed building on Block 6 is 6-stories. The proposed development for all floors is office space.

Conditions of Approval

1. This letter does not modify or relieve any additional requirements specified for this project by the City of Cupertino.

2. DEH approval of the SMP is valid for 1 year from the date of this letter. If site grading and earthwork activities have not been initiated by December 9, 2023, you are required to notify DEH and may be required to submit an updated SMP to DEH for approval.

3. DEH approval applies only to the proposed development as described in this Directive Letter and the SMP. If there are changes to the development plan as described in this Directive Letter and SMP, you are required to notify the DEH in writing, and you may be required to submit an updated SMP to DEH for approval.

4. A copy of the SMP must be reviewed by all applicable contractors prior to earthwork activities and must be kept on site and available at all times throughout the project. The Responsible Party shall ensure the SMP is reviewed and acknowledged by all applicable contractors prior to earthwork activities.

5. Any soil planned for reuse on site must be analyzed according to requirements specified in the SMP and compared to Regional Water Quality Control Board (RWQCB) residential ESLs or background concentrations to verify its suitability for reuse. Laboratory analyses and soil source figures shall be included in a Completion Report, which is discussed in the Required Submittals section of this Directive Letter.

6. Uniform Hazardous Waste Manifests shall accompany each load of hazardous waste transported to the transfer facility and/or disposal facility in accordance with regulatory requirements. Final copies of each manifest are required to be included in the Completion Report, including for non-hazardous waste disposed at an appropriate waste disposal facility.

Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA December 12, 2022

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7. Soil planned for import must be analyzed according to requirements listed in the SMP and compared to RWQCB residential ESLs or background concentrations to verify its suitability for use on site.

Proposed imported soil data shall be submitted to the DEH, and the proposed imported soil shall only be used on site if the DEH provides written approval. Laboratory analyses, soil source figures and DEH written approval shall be included in the Completion Report.

8. You shall immediately notify the Environmental Consultant and DEH upon discovering any unanticipated conditions. Examples of unanticipated conditions include, but are not limited to, the discovery of a pipeline, underground storage tank, or contamination at levels or in locations not described in the SMP.

Required Submittals

Prior to Issuance of Building Permits – Before building permits are issued, the following document shall be submitted to and approved by the DEH.

1. Vapor Intrusion Mitigation Design Report – Section 2.1 of the SMP lists features that shall require mitigation measures to prevent potential vapor intrusion. Mitigation design details shall be included in a Vapor Intrusion Mitigation Design Report. This report shall be submitted to and approved by the DEH before issuance of building permits.

After the DEH approves the report, the proposed designs shall be submitted to the City as part of the building permit application. Upon approval by the City, you are required to provide documentation of the City’s approval to the DEH. The approval shall be submitted after issuance of building permits, but before beginning construction on the garage foundation.

Prior to Beginning Garage Foundation Construction – Before construction of the garage foundation begins, the following technical documents shall be submitted to and approved by the DEH.

2. Remedial Excavation Completion Report – Section 3.0 of the SMP describes four remedial excavation areas. Three of the remedial excavations shall remove impacted soil from the Wolfe Road Area, Sears Area, and Soil Action Areas in order to decrease the concentration of contamination in soil.

The fourth remedial excavation shall remove impacted soil in order to decrease soil vapor concentrations. This area is referred to as the Soil Vapor Area. All four remedial excavations are located within the confines of the much larger underground parking garage excavation.

Post-excavation soil samples shall be collected from the bottom and sidewalls of the soil remedial excavations to confirm remedial goals have been achieved. Post excavation soil vapor samples shall be collected from the Soil Vapor Area, to evaluate whether the modified soil gas screening levels (M-SGSLs) have been achieved. Following completion of the four remedial excavations and before beginning construction of the parking garage foundation, a Remedial Excavation Completion Report shall be submitted to and approved in writing by the DEH. If remedial goals are not achieved, the DEH may require an additional workplan to address remaining contamination.

Prior to Building Occupancy – Before the building is occupied, the following documents shall be submitted to and approved by the DEH.

3. Operation, Maintenance, and Monitoring (OM&M) Plan – An OM&M Plan shall be submitted to the DEH for review and approval. The OM&M Plan shall include details and a description of verification monitoring to demonstrate that the engineering measures described in the SMP are meeting Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA December 12, 2022

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design performance criteria. The OM&M Plan shall include an inspection schedule of all engineering controls necessary to protect future occupants. At a minimum, the inspections shall include the concrete foundation, utility runs which enter the building through the parking garage, and the mechanical ventilation system. The OM&M Plan shall describe prohibited activities which could damage the engineering controls and shall list required procedures should the engineering controls be damaged. A copy of the final DEH-approved OM&M Plan shall be referenced in the Deed Restriction/Environmental Covenant (described below).

The OM&M Plan shall include a minimum of five verification sampling events to evaluate the operational effectiveness of the engineering controls. For each sampling event, sub-barrier, indoor and ambient air samples shall be collected. Indoor air samples shall be collected from the parking garage.

All air samples shall be collected concurrently. The five sampling events are generally described below.

Samples shall be analyzed for volatile organic compounds (VOCs). After Sampling Event 5, the DEH shall determine if additional sampling is required.

a. Sampling Events 1 and 2 – Sampling to occur following building completion and prior to occupancy. Indoor air samples shall be collected over two 24-hour sampling periods: one with the HVAC system on and one with the HVAC system off or limited if ventilation cannot safely be turned off (ex. garage ventilation). The results shall be included in a Pre-Occupancy Verification Monitoring Report, which must be approved in writing by the DEH prior to building occupancy.

b. Sampling Events 3 and 4 – Sampling to occur 6- and 12-months following building occupancy.

Results shall be included in a Long-Term Verification Monitoring Report (1-Year Event).

c. Sampling Event 5 – Sampling to occur 1-year following Sampling Event 4. Results shall be included in a Long-Term Verification Monitoring Report (2-Year Event).

4. SMP Completion Report – Upon completion of all preoccupancy tasks described in the SMP, a SMP Completion Report shall be submitted. The SMP Completion Report shall be submitted to and approved in writing by the DEH prior to building occupancy. The report shall include confirmation that the earthwork was completed according to the SMP; include descriptions and justifications for any activities that varied from the SMP; include details regarding dust control monitoring, include details of any excavations and confirmation soil sampling; include details of any removal of waste or contamination not previously identified in the Remedial Excavation Completion Report; include final waste manifest(s) for disposal of soil and/or groundwater removed during construction not previously identified in the Remedial Excavation Completion Report; and include documentation of the source(s), analyses, volumes, and locations of any soil reused on site and any imported clean fill.

5. Deed Restriction/Environmental Covenant – The Deed Restriction/Environmental Covenant will reference the final DEH-approved OM&M Plan, and the Vapor Intrusion Mitigation Design Report.

The Deed Restriction/Environmental Covenant will include a detailed description of the restrictions associated with any change in land use and a plan to provide an overview of the legal and administrative controls and methods for disseminating information to minimize risk during potential future below- ground construction, site maintenance, potential future property transactions, and financial assurance mechanisms for long-term OM&M. Upon acceptance by all parties, the Deed Restriction/Environmental Covenant will be signed by the Responsible Party or current property owner at the time of recordation, and subsequently recorded at the County of Santa Clara Office of the Clerk- Recorder. A copy of the final recorded Deed Restriction/Environmental Covenant and document filing receipt from the County Clerk-Recorder shall be uploaded to GeoTracker prior to building occupancy.

Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA December 12, 2022

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6. Pre-Occupancy Verification Monitoring Report – As described in the OM&M Plan, two pre- occupancy verification monitoring events (Sampling Events 1 and 2) shall be conducted to evaluate the effectiveness of the engineering controls. One with the HVAC system on and one with the HVAC system off or limited if ventilation cannot safely be turned off (ex. garage ventilation). This report shall include the results of Sampling Events 1 and 2. This report must be approved in writing by DEH prior to building occupancy.

The SMP Completion Report and Pre-Occupancy Verification Monitoring Report may be submitted separately or together as one report. Both reports must be approved by the DEH in writing prior to building occupancy.

After Building Occupancy – After building occupancy, the monitoring reports listed below shall be submitted to the DEH. The reports shall include the results of any sampling and inspections described in the OM&M Plan.

7. Long-Term Verification Monitoring Reports – As described in the OM&M Plan, at least three long- term verification monitoring events (Sampling Events 3, 4, and 5) shall be conducted to evaluate the long-term effectiveness of the engineering controls. Reports shall be submitted to DEH after the 1- Year and 2-Year monitoring events. Results of the sampling events shall be compared to screening criteria listed in the SMP. If indoor air concentrations exceed the listed screening criteria, DEH shall be immediately notified.

Required Submittals

In summary, please submit the following technical documents to the DEH (Attention: Mr. Gerald O’Regan) by uploading them to GeoTracker according to the following schedule.

1. Prior to Issuance of Building Permits
a. Vapor Intrusion Mitigation Design Report – Prior to issuance of building permits, but no later than December 30, 2023

2. Prior to Beginning Garage Foundation Construction
a. Remedial Excavation Completion Report – Prior to starting construction for garage foundation, but no later than June 30, 2024
b. Confirmation of City Approval of Vapor Intrusion Mitigation Design – Prior to starting construction for garage foundation

3. Prior to Building Occupancy
a. Operation, Maintenance, and Monitoring (OM&M) Plan – Prior to starting construction for garage foundation, but no later than June 30, 2025
b. SMP Completion Report – Prior to building occupancy, but no later than December 30, 2025 c. Deed Restriction/Environmental Covenant – Prior to building occupancy, but no later than December 30, 2025
d. Pre-Occupancy Verification Monitoring Report – Prior to building occupancy, but no later than December 30, 2025

4. After Building Occupancy
a. Long-Term Verification Monitoring Report (Sampling Events 3 and 4) – Within 12 months following building occupancy
Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA December 12, 2022

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b. Long-Term Verification Monitoring Report (Sampling Event 5) – Within 24 months following building occupancy

Reports are required pursuant to our authority under Section 101480 of the California Health and Safety Code. Each report shall include conclusions and recommendations for the next phases of work required to protect water resources, human health and safety, and the environment at the site. All required work shall be performed in a prompt and timely manner. Revisions to the schedule shall be requested in writing at least two weeks prior to the due date with appropriate justification for the anticipated delays and a proposed revised schedule.

The California Business and Professions Code (Sections 6735, 7835, and 7835.1) require that work plans and technical or implementation reports containing geologic or engineering evaluations and/or judgments must be performed under the direction of an appropriately registered or certified professional.

Perjury Statement

All proposals and reports submitted to this office must be accompanied by a cover letter from the Responsible Party which states, at a minimum, the following:

"I declare, under penalty of perjury, that the information and/or recommendations contained in the attached proposal or report is true and correct to the best of my knowledge."

This letter must be signed by an officer or legally authorized representative of the Responsible Party.

If you have any questions, please contact me at (408) 918-1974 or via email.

Sincerely,

Gerald O’Regan, PG
Environmental Health Geologist
Site Cleanup Program
Gerald.O’[email protected]
Cell: (408) 771-1336

cc: Rick Freudenberger, WSP ([email protected]) File – GeoTracker

Gerald O'Regan
From: Rhoda Fry
To: City Clerk; City Council
Subject: City Council December 5 2023 Agenda #13 Vallco Date: Tuesday, December 5, 2023 3:08:26 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Council,
City Council December 5 2023 Agenda #13 Vallco
Please conduct a City Council meeting showing Vallco’s new plans.

Given that the County found the changes to the plans to be substantive, I have to doubt that they’d be compliant with SB 35.

Sincerely,
Rhoda Fry
County of Santa Clara
Department of Environmental Health

Hazardous Materials Compliance Division
Site Mitigation Program
1555 Berger Drive, Suite 300
San Jose, CA 95112-2716
(408)918-3400 FAX (408)280-6479

Board of Supervisors: Sylvia Arenas, Cindy Chavez, Otto Lee, Susan Ellenberg, S. Joseph Simitian County Executive: James R. Williams
August 22, 2023 APN: 316-20-120

Vallco Property Owner, LLC
c/o Nandy Kumar ([email protected])
2600 El Camino Real, Suite 410
Palo Alto, CA 94304

Subject: Parcel West of Wolfe Road
Site Cleanup Case Name: Vallco Town Center
10123 North Wolfe Road, Cupertino, CA 95014
Santa Clara County Case No.: 2021-16s

Dear Mr. Kumar:

As you know, the Department of Environmental Health (DEH) approved the Site Management Plan (SMP) dated November 2022 for the Vallco Town Center site described above (“Site”) in a Directive Letter dated December 12, 2022. DEH’s approval of the SMP is limited to the project description included in the SMP and, restated in DEH’s Directive Letter.

On July 21, 2023, the Department of Environmental Health (DEH) met with your development team to discuss certain material changes you may make to the development plans which would necessitate conforming changes be made to the SMP. Those proposed changes, as we understand them, are as follows:

1. Site development and occupancy in phases. (The approved SMP does not consider phasing the Site development and occupancy).

2. Construction of six additional buildings at the Site for a total of 12 buildings. (The approved SMP considers construction of only six buildings, referred to as Blocks 1 through 6.)

3. Elimination of subterranean parking garages beneath some or all of the buildings. (The approved SMP includes mechanically ventilated parking garages beneath every building).

DEH considers these potential changes to the proposed development plan to be significant deviations from the development plan considered by DEH when it approved the SMP. Of particular significance is the removal of the subterranean mechanically ventilated parking garages from some or all of the buildings.

This is because the approved vapor intrusion risk evaluation relied, in part, upon a mechanically ventilated parking garage to disrupt potential vapor intrusion. The soil excavation necessary to construct the approved parking garage was also expected to remove contaminated soil.

Vallco Town Center, 10123 North Wolfe Road, Cupertino, CA August 22, 2023

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At this time, DEH has not received written notice confirming that the proposed changes to the development plan discussed during the July meeting are final and understands that you are still evaluating whether to implement these proposed changes to the development plan. Please be aware that if you decide to make changes to the development plan, you are required to notify the DEH in writing of these changes.

Specifically, Condition of Approval #3 in DEH’s Directive Letter states:

DEH approval applies only to the proposed development as described in this Directive Letter and the SMP. If there are changes to the development plan as described in this Directive Letter and SMP, you are required to notify the DEH in writing, and you may be required to submit an updated SMP to DEH for approval.

Once DEH receives and reviews modifications to the development plan, it will determine whether corresponding modifications to the SMP are necessary. If so, DEH may rescind approval of the SMP and you may be required to submit an updated SMP to DEH for approval.

Depending on the nature and scope of modifications to the development plan, DEH may also require additional site assessment, risk evaluations, and mitigation measures. If required, these items would need to be incorporated into a revised SMP that must be resubmitted to DEH for approval. Therefore, please be aware that changes to the approved development plan may result in delays to the construction schedule.

In addition, if changes to the approved development plan cause residual contamination to remain on the Site, DEH may require the recordation of a restrictive covenant on the property as well as long-term monitoring and inspections to manage the long-term risks.

If you have any questions, please contact me at (408) 918-1974 or via email.

Sincerely,

Gerald O’Regan, PG
Environmental Health Geologist
Site Cleanup Program
Gerald.O’[email protected]
Cell: (408) 771-1336

cc: Rick Freudenberger, WSP ([email protected]) Albert Salvador, City of Cupertino, Special Project Executive ([email protected]) File – GeoTracker

CC 12-05-2023
Written
Communications
Item No. 14
Update on Main Street
From: Rhoda Fry
To: City Clerk; City Council
Subject: City Council December 5 2023 Agenda #14 Main Street Date: Tuesday, December 5, 2023 3:20:03 PM
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear City Council,
City Council December 5 2023 Agenda #14 Main Street
It is very sad that “Main Street” is not providing the needs for the local neighborhood and has created mainly a “Restaurant Mall,” not a true “Main Street.” Now the neighbors are the victims of a really bad development agreement – please consider this when making agreements in the future.

The project has not met expectations in other areas– the developer received many concessions for certain features that never materialized.

Please do better next time.

Sincerely,
Rhoda Fry
PS – I do not live near this project

Cupertino City CouncilDecember 5, 2023

Cupertino City Council
December 5, 2023